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real estate
steady cash flow
golden nugget
positive cash flow
income investment
passive income
investment strategies
residual income
initial investment
internet businesses
Real Estate The Ideal Investment
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Real Estate The Ideal Investment

There are many investment paths that can potentially help you achieve your financial goals. The stock market, home based business, entrepreneurship, and Internet businesses are excellent wealth conduits, but real estate tops them all. The above mentioned investment strategies usually only provide one direct path to wealth, while real estate provides five. Let me explain the five wealth generating conduits that real estate provides:

1) Income: Investment property can produce monthly residual income. This kind of passive income creates consistent and steady cash flow for the investor. This income is produced by renting and or leasing of the property. Your property now transcends into your personal cash station that has the potential to provide generational wealth. Most real estate properties when properly maintained can have a life expectancy of over 100 years. Wow!!! Just imagine your initial investment producing residual income for 100 years. That's an exceptional return on investment!

2) Depreciation: One major advantage of owning real estate, particularly investment property are tax deductions that can offset income. The IRS generally allows the depreciation of a structure for a period of 27.5 years. Properties eventually wear out over time, and functionality becomes obsolete due to their older features no longer in demand. Depreciation is a great benefit of owning property because potential taxable positive cash flow becomes offset by the depreciation of the asset.

3) Equity: Equity is the golden nugget in real estate investing. The bottom line is that equity means value, and value means wealth. The more equity you have in your property the more wealth you build. Equity is defined as the cash value of a property minus the debt owed (loan balance). Many investors initially purchase their properties at heavily discounted prices far below market value. They get the golden nugget (gain equity) immediately. Equity is the most powerful weapon in the real estate arsenal. Remember, “You make your money when you buy, not when you sell."

4) Appreciation: Appreciation is when the value of a property increases over time. Property value is affected by supply and demand, inflation, and capital improvements to the structure. Appreciation is also a powerful, but often forgotten wealth building conduit in the real estate investment industry.

5) Leverage: Real estate has one more trick up its sleeve. That trick is leverage. Leverage enables the cash-strapped investor to acquire an income producing asset without initially paying for it. Leverage allows the investor to borrow money from a lender to purchase the property. This helps the investor maximize his/her profits. To maximize a leveraged position, make the minimum down payment on a property that has a strong indication of appreciating over time.

I hope this helps you make a well informed decision on your next ideal real estate investment. Remember, better information means bigger profits!


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