Why Apartments are such a great investment

  1. Leverage- Multi Family real estate is one of the easiest assets to leverage (use debt and OPM) on. Not only does this increase your purchasing power, it increases your returns because you are putting less of your own money in. Real Estate the best asset if you were to use debt as part of your acquisition.

  2. Cash Flow- Cash flow is essential in todays economy. Without cashflow you would be using your principal and diminishing it over time. Instead let your money work for you. This alloys you to receive cashflow from the investment while having that capital increase over time.

  3. Tax Benefits- Real Estate has some of the greatest tax benefits you can get. The tax benefits in real estate is through what’s called depreciation. On paper the government sees that the value of the building (you can’t depreciate the land) goes down over time even when the value of the property is going up. This is one of the most powerful tax benefits you can get. You can also implement what’s called a Cost Segregation Analysis. This alloys you to accelerate the depreciation of the buildings so you get larger depreciations earlier in ownership. This is based of time value of money. The save money is worth more now than in the future due to inflation.

  4. Necessity- Unlike Stocks, Bonds and Mutual Funds, shelter is a necessity for humans to survive. This shelters the asset during tough economics times when the stock market can lose its value very quickly. Real Estate is not liquid. You can’t just get on your phone and sell your position. If you have all your saving in the stock market, it can be wiped out by lunch.

  5. Tangible- Real Estate is an asset you can drive by, touch and see. Most all other investments like stocks or insurances are paper assets. You don’t see them and you can’t hold them. Most people that have there investments in 401k and IRA don’t even know who is really handling there money. This is all going on while wall street is handling your money and receiving massive fees on it. There interest is to fill there pockets with money. Not yours.