The Financial Upside of Investing in Real Estate

Los Angeles + Orange County Real Estate Podcast with Alfie McFadden

Last week we talked about leveraging your investments, so today I wanted to give you an example of what that could mean with real estate investing.

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Last week, we talked about using leverage to have renters pay your mortgage, increase your equity, and give you cash flow over time. Today, let's continue that conversation with an example.

Let's say you have $50,000 to invest and you choose something like stocks or a mutual fund. If those stocks rise by 10%, you'll make $5,000, which is great.

Now say you used that same $50,000 to invest in buying a $300,000 house, which you rented out. If the market increased by that same 10%, the great part is that your gain isn't based upon what you put in, but upon the overall price of the property.

Now your $300,000 property is worth $330,000, and your gain is $30,000. Your initial $50,000 is now suddenly worth $80,000.

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By investing in real estate, your value grows at a larger scale.

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Now, this is a very simplistic example to make it all easier to understand. Keep in mind that there are different strategies for this type of investment depending on where you're at in life.

You might be retired (or close to it) and want to be a little more conservative with your investment. Or, you might be young and have a lot of time to grow your investment.

If you have any questions about the benefits of investing in real estate or about the different strategies you can employ, you can always give me a call or send me an email. It would be my honor to help you.