As investors you love real estate because it can be a strategic and purposeful investment. After all, you work hard for your money and your money should work hard for you. I remember as a child my father saying nothing works as hard as the actual money itself. It was not until I was young adult and able to start investing I understood this concept. I learned there are a number of vehicles that indeed allowed money to work hard and multiply.
Real estate offers more controls than any investment available. I mean when you look at most investments, you have to ask yourself how much control do I have over this investment, should markets take an unexpected turn, do you have any say on what happens to the investment or its outcome?
At the risk of sounding like a control freak, to truly be a purposeful investor you need to have controls over the expenses so you can in turn control the returns. After you set up the purchase in your LLC or trust, you have control over the acquisition, operations and management. Here are ten things to consider:
- Purchasing in undervalued markets.
- Purchase within strong job markets.
- Purchasing in areas with Baby Boomer appeal.
- Purchasing that property within the sweet spot (best area and price point for maximum returns) of the market.
- Purchasing in markets with strong local economies ( and markets that are strategically attracting growth).
- Purchase properties that are structurally sound which will in turn provide more sustainable returns.
- You can capitalize on providing the best and highest use for the property.
- You are able to establish day one what your returns are and project long term the total returns of the investment.
- You can increase the total returns by doing updates and rehabbing a property.
- You can leverage, using 60% or more of borrowed money.
O.k I admit, I only listed ten here but I could easily come up with another ten or so. The point is, that it’s easy to see that real estate gives you better control over your investment dollar than any other investment can even try to match. Which makes real estate a most purposeful and strategic investment.