Why Build Wealth in Real Estate? 3 Secrets of Real Estate Investment

Have you ever wanted to know exactly why you should build wealth in real estate, or wondered what the top secrets of real estate investment really are? The reality is, we are always just a disaster or two away from another economic meltdown like 2008 (or worse), but real estate offers a safe way to diversify your financial portfolio, make money and secure ongoing income for retirement… Regardless of stock market volatility.

"Real estate builds wealth more consistently than other asset classes", wrote Forbes. "There are many ways to build wealth, but real estate might be the safest, steadiest and simplest way to do so".

Although real estate offers a wide variety of benefits and undeniable security compared to all other asset classes, most investors still don’t own more property than their primary residence. In large part, this is simply because investing in real estate won’t pay your financial advisor a commission fee, like stocks, bonds and mutual funds. Despite being overlooked and ignored by stock brokers, real estate offers a fantastic way to generate stable cash flow and preserve your nest egg, so we wanted to share three secrets of real estate investment your financial advisor won’t tell you!

Read on to see why building wealth in real estate is one of the smartest financial moves you can make if you want to secure ongoing retirement income and protect your portfolio from stock market volatility.

Use the table of contents below to navigate through the blog:

1. Real estate is the only investment that always beats inflation
2. Earn more and stress less with a passive real estate investment
3. Partner with experienced professionals to escape your comfort zone

1. Real estate is the only investment that always beats inflation

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The relationship between inflation, the stock market and real estate isn’t talked about nearly often enough and the importance simply can’t be overstated! The cost of the main expenses for any investment property - including the mortgage, property taxes and maintenance - stay relatively fixed over time, but rents and home values are almost always rising due to the effects of inflation. As a result, real estate serves as an incredibly power wealth-building tool and offers essential protection against inflation for your financial portfolio when used appropriately. On the other hand, the stock market typically fails to keep up with (much less surpass) the rate of inflation, which undermines the performance of stocks, bonds and mutual funds.

"When you consider all of the other benefits of investing in real estate, then include inflation, it’s amazing why more people aren’t taking the necessary steps to own as much real estate as they can", wrote Forbes.

Also Read: What Are the Benefits and Risks of Using My IRA to Buy Real Estate? What Are the Advantages of Real Estate Investing? Here Are 5 Key Advantages Real Estate Investing for Beginners - How Do I Really Start?

2. Earn more and stress less with a passive real estate investment.

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Many investors also remain unaware that investing in real estate doesn’t have to mean becoming a landlord, buying up a bunch of raw land, or otherwise directly owning brick-and-mortar properties! Instead, alternative options like private real estate investment funds and publicly traded REITs offer a different way to get all the benefits of real estate investing - including the ability to earn secure, ongoing tax-deferred / tax-free income for retirement when you buy using an IRA account - without the many headaches that always go hand in hand with owning property outright.

Here’s how it works: Fund or REIT Shareholders get to participate in some of the world’s most exclusive (and lucrative!) real estate markets (often to the tune of 12-15% ROI or higher!), without owning a single piece of property outright. In addition, the assets owned in private real estate investment funds and REITs are typically only made available elsewhere to high-net-worth individuals and financial institutions, so these alternative investment vehicles give average investors access to profits from real estate deals that would otherwise be totally out of reach.

3. Partner with experienced professionals to escape your comfort zone.

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Perhaps most importantly, building wealth with real estate requires thinking outside the box to identify the best deals. And when it comes to location, it’s easy to get trapped by thinking small, so remember: Staying local is only a smart move if you choose that path for good reasons! Even the most seasoned real estate investors seek out other professionals when they start making new moves, so treat this just like any other major investment. Take the time to sort through online reviews and client testimonials, until you locate experienced professionals to partner with that you can trust, and who will help you gain a deep understanding of whatever market(s) you are considering.

In summary, investing in real estate has been proven to provide essential portfolio diversification and higher returns with much less risk than stocks, bonds and mutual funds. And when you invest using money in an IRA account, real estate also offers a clear path to a more secure retirement, along with the ability to earn ongoing reliable income that is tax-deferred (or tax free in a Roth IRA)! Finally, if you opt to become a Shareholder in a real estate investment fund or REIT instead, you can still get all of the above benefits - including the natural hedge against inflation that real estate provides - without any of the stress that typically comes with direct ownership of investment properties.

If you are not a beginner, this might interest you.