Investment Myth -There is only One Way to Make Money Off an Investment Property

My biggest epiphany I realized early in my investing career and the reason why I like real estate is that it makes money three-pronged. Many people compare real investing to buying stocks. I think it can’t be any farther from the truth. A stock might go up 10% and real estate only went up 5%, but the appreciation is only one way real estate makes money. You make it three ways. Real Estate investors make money three ways

  • 1.Monthly Cashflow
  • 2.Mortgage Pay down (paid by tenants)
  • 3.Appreciation

You usually will have all three money streams going on a property if you’re doing it right. Real estate is leveraged; your return on investment is usually a lot higher than your appreciation of let’s say 5%. You’re looking usually closer to 20-30% ROI and that is conservative

Rental income is relatively recession proof. Even if the value of the property fluctuates, as long as you have tenants there will always be a cash flow, when you buy the correct properties.

David Giovanniello

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