The government cannot save you or your family, or ensure your financial freedom. Set your mind right about earning money. So, you must invest with income streams that give you positive cash flow, learn to leverage your debt, learn to handle inflation and take control of your physical assets.
Here are four reasons why investing income producing real estate is an excellent choice for protecting and growing your wealth:
Positive cash flow
One of the biggest benefits to income producing real estate investments is that leases generally secure the assets. This provides a regular income stream that is much higher than the typical stock dividend yields.
Using leverage to multiply asset value
Another important characteristic of commercial real estate investing is the ability to place debt on the asset, which is several times the original equity. This allows you to buy more assets with less money and significantly multiply asset value and increase equity as the loans are paid down.
Hedge of inflation
As countries around the world continue to print money to spur economic growth, it is important to recognize the benefits of owning income producing real estate as a hedge against inflation. Generally speaking, when inflation happens, the price of real estate, especially multi-tenant assets that have a high ratio of labor and replacement costs, will also rise.
Asset value appreciation
Over time, more and more inflation has made it into the economy, extremely reducing purchasing power. However, income producing real estate investments have historically provided excellent appreciation in value that meet and exceed other investment types. Properties historically increase in value as the net operating income of the property improves through rent increases and more effective management of the asset.