Why you should invest in Real Estate?

Real estate is the latest investment vehicle I was getting myself into. Before, I never imagined myself investing in condominiums as I saw it as just showing off. However, this thinking changed when I was able to attend a seminar about real estate. It opened my mind to the world of real estate investing and how powerful it can be if you do it right. No wonder some famous and wealthy people I admire invests in a lot in real estate. There's Donald Trump, Robert Kiyosaki, even Shaquille O'Neal. For the local ones, there's Henry Sy, Manny Villar and Jaime Zobel de Ayala. 

 So what are the benefits in investing in real estate? Let me share with you four of the most important reasons why I find real estate investing worthy to add in your portfolio. 

1.) Using banks as leverage 

In real estate, you can get help from banks to pay your properties. What happens is you pay a down payment for the equity of your property. This amount varies depending on the real estate developer. The remaining balance can be paid through a bank loan. This is the only type of investment where you can use banks as leverage. You cannot do this with stocks or mutual funds. 

 2.) Passive income 

It's very common for OFWs to invest in lots, wait for its market value to appreciate and sell them. However, there's no cash flow during the waiting period. If your wise enough, you can add a property to your lot and have it rented. I invested in real estate with the goal of earning passive income from its rental fees. Real estate properties can be really good cash cows. Imagine if you have ten properties that are rented and earning something between 50 to 100 thousand pesos. You could already live financially free. 

3.) Increase in market value 

If you want to beat inflation, this is one of the ways to do it. You no longer have to worry prices going up every year. Real estate properties increase in market value over time and this can be very useful especially if you know how to liquidate this increase in market value. 

4.) Your property as collateral 

This is one of the main difference between real estate and paper asset investing. In real estate you can have your property as collateral to get loan which is a percentage of the market value of your property. The best thing here is you can do this no matter how many times you want. 

There you go! If you want to build tested and proven cash cows, consider investing in real estate.