At Thornburg & Associates, Inc., we have extensive experience in the real estate business, and we want to help you get started with your first investment property. In this article, we will go over why investing in real estate is a smart financial move to help encourage you to start looking.
• Real Estate Generates Cash Flow. The first reason why real estate is a great investment is because real estate is highly effective at generating cash flow. Your investment property will start generating income for you as soon as you sign your first renter, and the cash flow it provides will most likely get stronger over time as you pay down the mortgage on the property and increase its equity.
• Real Estate is Great for Building Wealth. Another reason why investing in real estate is a solid financial move is because it allows you to build wealth more easily. As we mentioned above, as you pay down the mortgage on the property, you will build equity on it, which will in turn become part of your net worth. From there, you can use your new equity and wealth as leverage to buy additional properties and begin the growth cycle over again.
• Real Estate Resists Inflation. A third reason why investing in real estate is a smart financial decision is because real estate tends to act as a hedge against inflation. In other words, rent prices tend to rise along with other costs during periods of inflation, which means that real estate and the equity it represents tend to maintain their buying power and capital values.