More millionaires have been made through real estate than any other industry. One of Oppenlander Realty’s areas of expertise is investment. A primary reason to purchase real estate is the impressive return on investment. The average return for the S & P 500 was 4.5% in 2015. The average return for our clients who invested in real estate in 2015 was 18.3%.
There are numerous ways to invest in real estate and Oppenlander Realty is here to help the first time investor to the seasoned investor. Here are some of the popular avenues for investment: Rental Property, Land Development, Single family home, Land banking, Warehouse, Office Space, Foreclosure Auction, Tax Deed Sale, Probate sale, Estate Sale, Wholesale, Vacation Rental, Short Term Rental, and Real Estate Investment Trust (REIT).
One of the most popular choices for making money in real estate is owning and renting various types of real estate. The following are several illustrations why:
- Appreciation– Rental properties normally appreciate in value with inflation. Increased value can mean sale and reinvestment in higher value properties, or provide an equity line of credit to use for other investments. This is the second, and a historically proven, value component of real estate investment return.
- Inflation-proof investment– Rents usually increase with inflation, while mortgage payments on the property remain stable. This increases cash flow, without the increased expense for holding the property. When inflation goes up, it can also mean more renters as mortgages become more expensive for average consumers. More renters increase demand, so rents can escalate.
- Leverage– Using leverage, while being careful to buy properties with good rental yields, provides greater returns. Using $100,000 in leveraged assets to purchase three properties with down payments, instead of one for $100,000 cash, can greatly increase returns. Of course, all leverage involves risk, so the successful investor must understand how leverage impacts their real estate investments.
- Paying down loans– Amortization, or paying down loans, frees up more investment resources to increase leverage. Some investors use increased equity in one property to free up funds to invest in others.
- Property improvement for equity– Many investors intentionally purchase properties at a value price, because they lack certain features or could use improvements. They have calculated that the value of the improvements will exceed the cost, resulting in an immediate increase in equity.
Stocks and bonds are inflation-sensitive, and they typically involve only value appreciation potential and low or non-existent dividend/interest returns. Real estate provides multi-faceted investment returns and you can invest borrowed funds which is a huge advantage.
Oppenlander Realty has developed close relationships with banks, attorneys and wholesalers who sell properties below market value. Schedule a free consultation today and learn more about the Oppenlander Advantage. Building a real estate portfolio is one of the smartest decisions you can make with your money.
Invest in Real Estate today!