Why is Real Estate such a good investment?

One of the most important reasons to invest in Real Estate is because it is "real property" that can be touched, improved, lived in, rented out and resold.   Every one needs a home.  

It is probably the safest - steady as she goes investment out there.   Only 2 times in the last 40 years has Real Estate decreased in price nationally.   In both those years the decrease was less than 2%.   Not at all like the the crash stocks took in 2000 and the years following.   Many people would say that it only averages going up 5% a year.  This is true but look at the example below and you may get a different perspective of how the 5% effects your net worth.  

Probably the thing that really sets real estate apart from other investments is the ability to leverage the purchase without a lot of risk. 

Let's take a look at this difference with $50,000 dollars to invest. 

1st - lets invest the $50,000 in stocks and suppose that we have a pretty good year and make 10%.   We have now increased the value of those stocks to $55,000 in one year.  Pretty good.

2nd - lets invest the $50,000 in Real Estate by putting down 20% and buying a $250,000 dollar property.  Suppose we make the normal national average of 5% on the investment.   We have now increased our $50,000 to $62,500 ($250,000 X 5% + $12,500).  Much better.

3rd - lets invest the $50,000 in Real Estate but only put 5% down and buy $1,000,000 worth of property.   Suppose we make the national norm of 5% again this time.   Now we have increased our $50,000 to $100,000 ($1,000,000 X 5% = $50,000) in one year for a !00% return on our money.   

Some critics would say that I had to pay interest on the money borrowed and you know what - they are right!   So, this decreases our profit from 100% to only 92.5%  but I will take a 92.5% return on my money over a 10% return every day and twice on Sunday.  How about you? 

Check out Real Estate Investment in Georgia with us.  We have some great properties available!  You can also search properties available on the Columbus GA MLS.

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