Make Money In Real Estate

Written by Gregg Ruais
Bookmark and Share

Many financial experts believe that real estate investing is the best way to make money for retirement. The real estate market improves and declines independently of the stock market, so having both a stock and real estate portfolio is a great way to diversify and spread your risk. The advantage of real estate is that you can actually improve your cash flow while investing, whereas 401(k) plans and IRAs reduce income.

If you own a property and the monthly mortgage payments equal $2,000, for example, you want at least $2,000 of revenue each month. If the income from renting the home is equal to or greater than the payments, the house really costs nothing to buy. After 30 years or however long is takes to pay the entire mortgage, you own the house and can sell it for its full value and use that money in retirement.

Real Estate Vs. Equities

Financial advisors urge young people to contribute the maximum allowable amount to their 401(k) or IRA plans, despite the fact that doing so considerably hinders cash flow. The advantage of these plans is that they require no work. The money comes straight out of your paycheck, and all you have to do is decide which funds you want to invest in. Real estate investing takes considerable research and maintenance, and if you hire an external company to manage your property, your profits decrease.

The decision to invest in real estate or equities depends on your values. Can you live with less money in order to preserve your leisure time, or would you prefer to put in the extra work and improve your cash flow through real estate investing? Neither method of making money for retirement is guaranteed, but if you make the right decisions, both will work.

Bookmark and Share