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Why Invest in Real Estate – Wealth Creation
The purpose of this article is to outline how investing in real estate can create wealth.
Investing in real estate is a wealth creation method favored by the extremely wealthy that has to be a good sign!
But like most things, the benefits of real estate investment usually take some time, and success as an investor will usually come down to planning, planning and more planning.
Statistics tell us that, of 100 Australians aged 25 today, at age 65:
1 will be RICH
4 will be FINANCIALLY INDEPENDENT
5 will still be WORKING
24 will be DEAD
12 will be FLAT BROKE
54 will depend on other people
It wasn't that most of these people planned to fail, they just failed to plan.
There is some very powerful evidence that shows investing in real estate is the key to wealth creation but let us run through a few fast facts.
When it comes to building wealth increasing your property assets is a very good option.
Investing in real estate contains all of the attributes of solid wealth creation such as; capital growth, security, tax advantages, income and control.
Perhaps the most stand-out feature of real estate investment in terms of creating wealth is the ability for capital growth.
Capital Growth in real estate works like this.
Purchase a property for $ 200,000. After 10 years, it will be worth:
5% Capital Growth $ 326,000
10% Capital Growth $ 519,000
15% Capital Growth $ 810,000
Keeping in mind that as a property investment, during this period of wealth creation the real estate can be continually earning you income in the form of rental yield, which creates the allowance of tax offsets and allows you to maintain control over your investment.
Of course the prospect of such a good return on investment relies heavily upon making the right decisions about your real estate investment at the outset buy smart!
The real estate investment decisions you make will have an impact on the amount of wealth creation possible in your situation.
The decision begins at the buying process itself, and when and where you buy your real estate investments must be based upon a complex interaction of social, environmental and economic factors, plus the supply and demand in the market at the time and your income and repayment abilities.
Your own personal situation will also determine whether your plan for investment in real estate for wealth creation, whether you invest in residential or commercial properties, and whether you value cash flow, asset value or capital gains potential as more important.
In a nutshell, investing in real estate is one way to kick start your wealth creation plan.
The concept of owning land has been associated with the concept of wealth for many generations before us. While wealth creation through real estate investment these days is a little more complicated, the basic fundamentals persist;
Buy when the market is down;
Consider growth potential;
Borrow within your means;
Plan for interest rate rises;
Be realistic about rental yields;
Study market peaks and troughs;
Sell on a high.
My Knowledge Tips
1. Investing in real estate is a wealth creation method favored by the extremely wealthy that has to be a good sign!
2. Investing in real estate contains all of the attributes of solid wealth creation
3. The most stand-out feature of real estate investment in terms of creating wealth is the ability for capital growth.
4. The real estate investment decisions you make will have an impact on the amount of wealth creation possible in your situation
5. The concept of owning land has been associated with the concept of wealth for many generations before us. |