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Investing in Real Estate Vehicle for Wealth Building
Real estate is one of the best vehicles of building wealth. Historically real estate has outperformed other asset classes like stocks or bonds, and is reasonably predictable and less volatile. There were times when real estate went down and there were times where it went up but on an average it has given a sizeable annualized return Development report, the price of an average single-family home has gone up from $22,300 in1968 to $206,100 in 2003, an increase of 824% in a span of 25 years There are many ways to invest into real estate. With 100 percent financing options, low interest rates and good credit it's fairly easy to get started. Numerous articles and books have been written about investing in real estate and success stories are a plenty. Here, in a nutshell, are some of the most important reasons for investing in real estate. Appreciation. Traditionally real estate has been viewed as a "buy and hold" type investment vehicle. Real estate has recovered from cyclical declines and regional corrections and it may continue to do so in future, primarily because of tight supply and demand. Land is finite and housing is a necessity. According to the U.S. Census Bureau: the nation's population is projected to increase to 392 million by 2050 - more than a 50 percent increase from the 1990 population size. These factors presents a bright outlook for real estate investors. The fact that land is finite, and population is growing will cause most real property to rebound even if there is a market decline. Properties can be bought and held for appreciation provided one has the staying power. To avoid occasional declines, a smart investor should buy properties below market value by using creative acquisition techniques and realize a gain by quickly turning around and selling for a reasonable profit. Of course, properties bought below market value can be held for cash flow and long-term appreciation as well. Leverage. Leverage in real estate means making money on borrowed money. The power of real estate resides in using "other people's money." One can buy a property with zero down (100 financing) and make a profit upon sale as if it had been paid off entirely. Let's assume you decide to buy a duplex worth $500,000 with 100 financing. Income properties have been appreciating at an average of 7 percent per year. With a 0 percent down your property at the end of the first year is worth $535,000. At the end of the second year, it's worth $572,450. By using leverage or borrowed money to purchase a larger income property, you have increased your profit by $72,450 in just two years. A 14.49 percent return on a borrowed amount of $500,000. This is the power of leverage. Leverage coupled with appreciation can yield high profits. Tax Benefits. There are numerous tax benefits of owning real estate, gains from sale of primary residence up to ($250,000 for single, $500,000 for married filing jointly) is tax-free. IRS allows taking deductions for depreciating real estate assets. Legitimate expenses like interest, depreciation, insurance premiums, management fees, legal fees, repairs etc are all tax deductible. You only pay taxes on net profits. Real estate investing is an extremely rewarding process, but it needs perseverance and knowledge to achieve success. There are several proven techniques to make quick money but the key to success resides in buying properties below market value and selling them at the market or higher market price. Great deals can be found in foreclosures, fixer uppers, distressed properties and auctions etc. Happy Investing! Srini Saripalli is an entrepreneur, direct marketing expert and real estate investor. He is also a business development consultant to Fortune 500 companies. He is based in San Jose, Calif. Srini can be reached at http://www.srinisaripalli.com
MORE RESOURCES: Costar sues Zillow over photos, claims ‘systematic infringement’ Real Estate News by RealEstateNews.com Blackstone's Wesley LePatner, a mentor to women and real estate investing leader, killed in NYC office shooting Business Insider Real Estate Investment Trusts Score Legislative Wins Forvis Mazars US Real estate: Home prices climb in Martin, Indian River counties; fall in St. Lucie County Treasure Coast News Seattle-area real estate startup Flyhomes raises $15M as it pivots to 'Buy Before You Sell' model GeekWire I-78/I-81 Corridor commercial real estate activity picking up Lehigh Valley Business After 30 years, Linda A. Gary Real Estate moves office from prominent Worth Avenue corner Palm Beach Daily News Troy Furbay has been appointed Managing Director, Hospitality at Crescent Real Estate LLC Hospitality Net ‘Walking beside him’: Daughter continues stepfather’s real estate dream Mountain Home Observer The market is changing — and the industry's old rules are outdated Real Estate News by RealEstateNews.com Real estate: Condo prices rise in Indian River County; fall in Martin, St. Lucie counties Treasure Coast News Richland County property transfers recorded July 21-24 Mansfield News Journal US industrial real estate investor Terreno sells $82m portfolio IPE Real Assets America's Unhinged Real Estate Market Is Driving Down the Birth Rate Business Insider Central Pa. real estate company expands to Georgia Central Penn Business Journal Double digit price increases for Putnam real estate Mid Hudson News Real Estate Expert Jody Wainio of Buyers Choice Realty Shares Advice on Mortgage Pre-Approvals in HelloNation GlobeNewswire Fed Interest Rate Predictions: No Cut Expected Today, July 30, 2025 - Norada Real Estate Investments Fed Interest Rate Predictions: No Cut Expected Today, July 30, 2025 Norada Real Estate Investments Atlanta real estate mogul, former Hawks owner Tom Cousins dies at 93 Atlanta News First RE/MAX revenue continues to slip despite agent gains Real Estate News by RealEstateNews.com Haag-Brown Commercial Real Estate to open Bentonville office Talk Business & Politics Inside Zillow’s summer launch: 5 new tools built for agents - Real Estate News by RealEstateNews.com Inside Zillow’s summer launch: 5 new tools built for agents Real Estate News by RealEstateNews.com Executive Killed in Manhattan Shooting Was CEO of Blackstone's $53 Billion Real Estate Megafund Realtor.com Top residential real estate sales for July 14-18 in Longboat, Lido, St. Armands, Bird Key Your Observer Real estate transfers: 7/30 Toledo Blade Leading Arizona Real Estate Team JBRE Joins Real Brokerage, Bringing $310M Sales Portfolio Stock Titan News | UK commercial real estate investment slips slightly to £10 billion in second quarter - CoStar Delaware June home sales stronger than national numbers; median sold price at record high The News Journal Real Estate Transactions | July 14-18, 2025 Republic-Times Arkansas Commissioner of State Lands to auction more than 700 tax delinquent real estate parcels Thursday Hot Springs Sentinel Record Real estate office renovating former daycare The News-Enterprise Atlanta real estate tycoon Tom Cousins has died at 93 Rough Draft Atlanta Inside Hulk Hogan’s $11M Real Estate Empire EntertainmentNow Former Patrizia exec joins Oryx Real Estate Green Street News Christie’s Debuts Crypto Real Estate Division The New York Times Ledge Road property in Newport sold for $3.3 million tops latest Newport County sales Newport Daily News Real Estate Giant Anywhere Gives 100,000+ Agents Free Access to Canva Enterprise AI Marketing Platform Stock Titan The real estate market: 5 key themes to watch this week Real Estate News by RealEstateNews.com Exclusive: Apple to buy another Silicon Valley campus for $365 million San Francisco Chronicle Two of Frank Lloyd Wright’s earliest works are making real estate headlines Chicago Star Media Real estate trends highlighted Morrow County Sentinel Real Estate Transactions BusinessWest Asia Pacific commercial real estate investment surges to $31.2b in second quarter 2025 Institutional Real Estate, Inc. Luxury Presence Debuts the First Fully Autonomous AI Marketing Team for Real Estate Agents Business Wire Alex MacWilliam of Alex MacWilliam Real Estate in Vero Beach Shares Hurricane Preparedness Strategies to Protect Property Investment in HelloNation The Manila Times Population Growth in England and Wales: A Boon for Real Estate and Social Infrastructure Sectors AInvest Easton home on Sierra Drive that sold for over $1M 'epitomizes one-of-a-kind luxury' Enterprise News Slain Blackstone executive was a real estate powerhouse Crain's New York Business |
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