Whether you are just starting out on your journey of long-term investing or you have been doing it for a while, it is important to understand that there are certain principles that have already been tried and tested by the investors before you, and if you can follow their formulas, it will lead you to master long-term investing. While there are a ton of ways a person can use to build long-term wealth for themselves, Ralph DiBugnara believes to master one outlet first before spreading yourself out to thin trying to diversify. The outlet we are going to focus on today is Real Estate.
Make Money Quickly
While real estate investing may not make you super rich overnight, it can add zeros to your net worth faster than traditional investments. By including rental properties in your strategy, you can collect rental income from day one of your purchase. The key here is to buy a property that generates positive cash flow which is your rent minus mortgage, taxes, insurance and expenses
Long Term Profits
Real estate historically has outperformed most other investments including stocks in return on investment and more importantly are more stable. According to a 145-year study done by industry experts between the years 1870 and 2015 titled The Rate of Return on Everything, Residential real estate had the best returns, averaging over 7 percent per annum. Equities weren’t far behind, at just under 7 percent.
Lower Risk Investment
In one of the worst market corrections of all time in between 2007-2010 we saw an average of a 30% down turn on real estate. Currently that deficit has been erased and housing has been up further then that 30% loss. it is very hard to lose your whole investment in Real Estate and it will almost always come back over time unlike other investments.
Whether you choose to invest through fix and flips, being a landlord, Real Estate Investment Trusts, or, Crowdfunding, Real Estate Investment groups, real estate is a great way to help build long-term, stable wealth for yourself and can help you generate more income to expand your investing portfolios into to streams of income.