Reasons to Build a Real Estate Property Portfolio

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Posted: 05/01/2008-22/09/2010 || Rate this Article: 3 || Views

I think youll agree with me that real estate investment deserves a closer look when I tell you that according to many sources 90% of the worlds richest people made their fortunes from property!   

So here are just five quick reasons why I think you should consider building yourself a real estate portfolio. 

1)      Freedom By working to create a profitable business from your underlying property assets you can free yourself from the shackles of 9 5 employment where your creativity is zapped and your potential overlooked! 

In this day and age those who can say that they love their job are the much envied few.  For the rest of us the daily grind is simply necessary to keep a roof over our heads, feed and clothe our children and hopefully be able to afford to retire some day.   

Does that sound like freedom to you?   

I dont think so! 

The creation of a profitable property portfolio will allow you the freedom to make your own business decisions, to work when you wish and to manage your familys finances more effectively. 

2)      Leverage if you place a twenty thousand dollar lump sum into a bank you will earn interest on that figure alone the interest rate will likely be poor and taxation and inflation will eat away at any gains you make.   

Alternatively, by placing twenty thousand dollars into a property worth one hundred thousand dollars and using a banks money in the form of a mortgage to leverage up, you make will make the average annual increase on the full value of the property not just on your twenty thousand dollar investment! 

3)      Profit Twice with property you can profit once in the form of regular rental income earned and you can profit twice and big time from the average price gains your property will enjoy each year.   

Even during a real estate market down turn when prices stagnate or readjust your property will hold at least the majority of its value before once again attracting positive capital growth when the property market cycle begins to turn to profit again. 

4)      Consistent Growth over the last fifty years real estate has doubled in value every seven years.  If you average that out that means that property has grown consistently by just over ten percent a year.   

5)      Passive Income As your property portfolio grows so the amount of income you generate will increase.  You will not be able to stop this growth once it starts because each year your properties will go up in value and regularly youll be able to push up rental income!  

While you retain ownership of your properties so you will retain ownership of all the income and all of the growth in underlying value this is a passive income that you can take into retirement and hand on to your children and grandchildren when youre gone. 

A Final Word Making an investment into real estate is just like making any other form of investment.  There are associated risks and past performance is not an indicator of future potential.  Furthermore this article does not constitute personal direct advice.

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