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5 Reasons to Build a Real Estate Property Portfolio
I think you’ll agree with me that real
estate investment deserves a closer look when I tell you that according
to many sources 90% of the world’s richest people made their fortunes
from property!
So here are just five quick reasons why I think you should consider building yourself a real estate portfolio.
1)
Freedom – By working to create a profitable business from your
underlying property assets you can free yourself from the shackles of 9
– 5 employment where your creativity is zapped and your potential
overlooked!
In this day and age those who can say that they
love their job are the much envied few. For the rest of us the daily
grind is simply necessary to keep a roof over our heads, feed and
clothe our children and hopefully be able to afford to retire some day.
Does that sound like freedom to you?
I don’t think so!
The
creation of a profitable property portfolio will allow you the freedom
to make your own business decisions, to work when you wish and to
manage your family’s finances more effectively.
2) Leverage –
if you place a twenty thousand dollar lump sum into a bank you will
earn interest on that figure alone – the interest rate will likely be
poor and taxation and inflation will eat away at any gains you make.
Alternatively,
by placing twenty thousand dollars into a property worth one hundred
thousand dollars and using a bank’s money in the form of a mortgage to
leverage up, you make will make the average annual increase on the full
value of the property not just on your twenty thousand dollar
investment!
3) Profit Twice – with property you can profit
once in the form of regular rental income earned and you can profit
twice and big time from the average price gains your property will
enjoy each year.
Even during a real estate market down turn
when prices stagnate or readjust your property will hold at least the
majority of its value before once again attracting positive capital
growth when the property market cycle begins to turn to profit again.
4)
Consistent Growth – over the last fifty years real estate has doubled
in value every seven years. If you average that out that means that
property has grown consistently by just over ten percent a year.
5)
Passive Income – As your property portfolio grows so the amount of
income you generate will increase. You will not be able to stop this
growth once it starts because each year your properties will go up in
value and regularly you’ll be able to push up rental income!
While
you retain ownership of your properties so you will retain ownership of
all the income and all of the growth in underlying value – this is a
passive income that you can take into retirement and hand on to your
children and grandchildren when you’re gone.
A Final Word –
Making an investment into real estate is just like making any other
form of investment. There are associated risks and past performance is
not an indicator of future potential. Furthermore this article does not
constitute personal direct advice.
About the author:
Rhiannon
Williamson is a freelance writer whose many articles about
international property investing have appeared in publications around
the world. Visit her site AmberLamb to read her latest articles.
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