Why real estate?

I would like to ask you something.

Have you ever asked yourself, how many ways are there in which you could make money? I mean in general. Forget about the real estate for a moment. The one way that everybody of us knows is to offer your efforts and skills on the market and to earn a salary for this. This is the so-called 9 to 5 job. That is what most of the people are doing.

The other way that will also appear in your mind very quickly is to try to trade some products or services. You buy them cheap and sell them after some or even no improvement with profit on the market. In this category I include all producers of any kind. They buy resources and materials, combine them in a product and sell this increased value on the market with a decent profit. All tradesmen are certainly also included in this category.

Are there any other ways to realize a profit? Of course, there are and one of them is to structure a spread. Very briefly explained that means that you must find an asset, producing a certain return for you. You must finance the acquisition of this asset with a financing that is cheaper than the return from the asset itself. The difference or the spread between both prices is your profit. Actually, that is your ultimate goal when you invest in rental properties for the long term. This is incredibly powerful tactics, if you apply it carefully and know what you are doing.

In order to create the spread, you need stable asset with relatively constant or increasing price with the time. This asset must be also acceptable for your lenders, so that you could acquire financing based on it. In the most cases your lenders are the banks. You must try to create a stable and long term spread – the income from the asset must not be very volatile. It must be stable or increasing in the time.

Very suitable asset class for this type of spread creation is the real estate. It fulfills these requirements. The real estate investment could generally speak secure you very stable and long-term spreads that could eventually lead you to your desired additional cash flow stream and eventually to your financial freedom. How this is done is discussed in my course When is the Best Time to Invest in Property? I have described there the requirements for the "buy low and sell high" strategies. For them you will need in any way this course because it will help you to identify the best time to invest in real estate. For the so-called cash flow strategies, it is important that you select the right financing. I give you some examples in the course to illustrate this. If you ask me this is eye opening for many people.

So to answer the question "Why real estate in the first place?" I would say because it is stable and predictable investment asset class. Why is it predictable is also answered in my course When is the Best Time to Invest in Property? The cycle is working actually like a clock. Once you learn about it you will never have again the same understanding of the real estate market.

© 2024 Svetoslav Deltchev