Top 3 Reasons Buying an Investment Property is the Best Way to Build Your Net Worth

Whether you have recently graduated from college or is getting close to retirement, it is likely that you have given some thought as to how you can grow your net worth. In today’s blog post we’ll have a look at top 3 reasons buying an investment property is the best way to build your net worth. 

You might have invested in stocks, picked up a few bonds or have a 401(k) plan set up to help fund your retirement. But have you considered buying real estate as part of your portfolio? Let’s explore why this could be a great option.

Reason #1:  It Generates Passive Income

One of the best reasons to hold real estate as part of your investment portfolio is that it can generate passive income in the form of rent. Whether you buy a single-family home or an apartment block, you can almost certainly find interested tenants who will live there.

Part of the rent you receive each month will cover the costs of owning and operating the property. The rest of it is income which will continue to build over time.

Reason #2:  It Increases In Value Over Time

Another great reason to invest in real estate is that in most cases, it increases in value over time. As long as you are maintaining the property and investing in its upkeep you have a decent shot at it being worth more in the coming years, should you decide to sell.

Keep in mind that real estate is cyclical and that it’s not always going to be the right time to sell and realize your gains.

Reason #3:  You Can Leverage Equity To Buy More Properties

Finally, our third reason that real estate is the best way to build your worth is your ability to use it as leverage to buy more real estate. For example, say you decide to purchase a house valued at $100,000 as an investment property.

Once the mortgage on that home is paid off, you have an asset valued at $100,000 that you can then borrow against. So you can go out and acquire another $100,000 home without having to sell the first. As you can see, this can scale quite nicely over time.

Related Post: 4 Things You Should Never Say if You Hope to Sell Your Home

Key Takeaway (Top 3 Reasons Buying an Investment Property is the Best Way to Build Your Net Worth)

Whether you have recently graduated from college or is getting close to retirement, it is likely that you have given some thought as to how you can grow your net worth. As noted above, real estate investment generate passive income, it increases in value over time and you can leverage equity to buy more properties. With that in mind it is to your advantage to pursue real estate investment as an option for building your net worth.

If you are interested in learning more about real estate investing and how you can make use of mortgage financing to purchase properties, give your local real estate agents a call. They will be happy to point you in the right direction.

It is always a great idea to seek out legal counsel before signing any documents or contracts. When you are ready you can learn more here.

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We would love to hear from you! What are your thoughts on real estate investment?

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Cheers!