Why Millionaires Invest in Real Estate and Why You Should Too
Updated: May 22
Real Estate is one of the most popular investment vehicles among the wealthy.
Billionaire Andrew Carnegie is said to have been quoted saying, “90% of billionaires become so through owning real estate.”
Either through direct income or tangent advantages, properties make it easier to grow your capital and venture into investing. It also helps that there are multiple routes to wealth creation in real estate: you can rent, sell or even simply own and wait for the property to appreciate.
There are plenty of incentives to invest in real estate, but here are some of the top reasons why seasoned investors bet on real estate:
Clear Investment Win
Experienced investors see three main advantages in real estate: positive cash flow, tax advantages, and ‘depreciation. Combining these three elements gives you the most returns on your investment.
Positive cash flow means that money steadily comes in. Rental properties, for instance, provide reliable income on top of other potential fees you can collect from the investment. This gives the investor more resources to spend or put toward another investment.
Meanwhile, tax advantages give you relief from regular government dues through delayed taxation or reduced fees. Real estate is well known for providing these benefits, notably the 1031 Exchange Rule. It encourages investors to keep growing their money through like-kind investments and worry about taxation later.
All sorts of business expenses can also be charged against your earnings, which lowers your dues and thereby increase your profit. This is the case for depreciation, a strategy by which you deduct the anticipated decline in your property. You can use this number as an investor to keep your property competitive and in its best condition.
Grows with your Goals
What’s more, investors can quickly scale their investments. They can invest passively and put their money behind the most attractive deals without taking their time away from their current pursuits. This can easily equate to thousands of dollars saved or more for someone whose time is worth so much.
General Partners, like Makaan Investment Group, can look after their investment as they continue to set their sights on the future. They also enjoy added stability from real estate, which help keep them aggressive with their growth targets.
Trusted by Investors & Investment Partners
Because it is a tangible asset of significant value, properties can be leveraged for funding. You can borrow for real estate or borrow against the asset. Both investors and financial institutions recognize real estate as a reliable tool to build wealth and, as such, make it easier for investors to cast their stake in real estate.
Real estate has made many millionaires, and millionaires have been keen on investing in real estate. Undoubtedly, there is potential to grow your money in this space. However, is this investment really for everyone?
Can an average Joe/Jane build wealth through Real Estate?
There will always be some parameters you will have to meet as an investor. Real estate offers a wide selection of property classes, sizes, and locations, and you can match these attributes with your ability to invest.
One way to get started is through Multifamily Real Estate. These properties focus on rental income and passive investing. With this investment, you can pool your funds with other investors to access more competitive properties without the full property price or the headache of managing the investment.
Are you ready to explore real estate as an investment?
Talk to our team at Makaan Investment Group to see if a multifamily investment in Houston, Texas, is for you. Reach us by visiting this page or calling/texting 281-500-8554.