DataDrivenInvestor
Jul 23
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In 2018 I bought a four-bedroom apartment on the third floor for $51,400. 2 years later, in the same neighborhood, I purchased for my mon a 3-bedroom apartment with fewer meters than the first one for $62,000.
I still consider the last one a good deal because the first one I bought is now $70,000 on the market, almost 50% up from my purchase.
Real estate is one of the best investments someone could make in their life; however, there are still people who are unsure if buying a house is a good idea.
Some of the excuses I have seen are: “we are in a bubble of high prices right now” (read it at any year), “sometimes its better to rent even if you can afford one,” “there are better investments that could give you better returns,” or “is not a passive income at all, you will have to work to have the money.”
I will show you why those excuses are not valid and how real estate remains one of the best sources of investment you could make.
There are thousands of excuses to not buy a house. Most of them are invalid if your purpose is to make money with them over time.
Some people don’t want a house for personal purposes (completely cut off from the money they can make) that are totally valid, but in the investment opportunity, this is why those excuses don’t apply:
“We are in a bubble of high prices right now.”
The housing market has always bounced back from past bubbles that caused home appreciation to decline. For those who held on to their investments during those uncertain times, prices have returned to normal, and appreciation has returned to normal.
“There are better investments that could give you better returns.”
There will always be a better investment if we focus only on profits. You will not have a computer business if you think cars are more profitable; you will not buy ETH if you feel Bitcoin will rise more.
However, even if other business opportunities could give you better returns, you will not find one with less volatility, good return over time, less work than a traditional business, and with all those clients than a house.
“It is not a passive income at all; you will have to work to have the money.”
In long-term rentals, real estate is more passive than having a business. In short-term rentals, it could have the same amount of effort as many companies (or even less, considering most people rent at least two nights).
If you don’t want to make any effort at all, or you will need millions of dollars to receive money from a certificate of deposit, or you don’t want to earn money at all.
None of those excuses will block you from making from 20 to even 1000% return on buying a property. So the profit and opportunities you could make by buying a property are more powerful than everything people say to stop you from investing there.
Unlike bonds, certificates, stocks, or options, you can actually force appreciation on a real estate investment.
Real estate appreciates on its own. On average, real estate appreciates 3% — 5% a year without you doing anything, only having the house. But, you can increase the appreciation rate by renovating or repairing.
Some people professionally dedicate themselves to buying houses in poor condition, renovating them, and selling them for up to 100% of their initial investment.
So you don’t have to wait for a specific moment to sell at a profit when you have a house; you can also make it more valuable now. Something that you will not see in any other market, whose only way to see profits is to wait for conditions to allow it.
Something I don’t like about stock, options, and crypto market, is that when everything is down, your monthly cash flows are also down.
Even if stock still gives dividends, you will receive less money for them. If you have your foreign currencies in certificates, you will have less money when you exchange them. In the crypto market, even if you have your tokens staked (that could represent a risk), you will receive less money for them.
However, even if your house costs less, you can still rent it for the same price as always.
Also, assuming you use your property as your own home, in periods when your other businesses are not giving you the regular profits, you still wouldn’t have to pay rent.
I know short-term rentals have periods of no guests, like in the summer when all the states have a good climate, but you can be prepared for those moments because they are specific.
For example, Shelby Church, a Youtuber, and Airbnb house owner, explained in a video that she is not receiving any rentals because in summer, Airbnbs are low in the area. Still, she already knew that and saved money for that moment.
Contrary to the other markets where the low periods are unpredictable and are hard to get prepared for those times with precision.
When I became interested in the world of investments, I did some courses and seminars about chart analysis and understanding the stock market. However, I lost a lot of money trying to trade or when I made my first portfolios.
I have already one year and a half in the crypto market, and I still lose money due to dumb decisions believing it will turn out good.
The real estate market is different. The license to become a real estate agent takes, on average, 4–6 months, but you can take pre-licensing courses online that will give you all the information you need to understand the basics.
Even if you decide not to take any courses, books, or anything, it could turn out good to buy a house. When I bought my first house, I just wanted a place to live, but in the end, I didn’t like the place, and without any experience, I could earn more money selling it.
Another example was T-Harv-Eker parents, who bought a piece of land for $60,000 just because they had enough money to have it, and ten years later, they sold it for $600,000.
Several sources have shown how 90% of self-made millionaires obtained their wealth by investing in real estate. And most of them have the same reasons for choosing that source of income: it’s safe, easy to understand, and profitable over time.
If there is something that experience has taught me, it is to always analyze how others have achieved success. Many times by replicating their actions, we can also have good results.
One of the biggest reasons millionaires have real estate in their portfolios is because a home will always be a necessary business.
No matter what new businesses come along, what great technologies invent, or what transportation becomes popular, people will always need a place to live.
You can have thousands of competitions, and you still will get someone specifically interested in yours, and you don’t need hundreds of assets in inventory because one is enough to make you rich over time.
If you have the power to buy a house, you should consider putting one in your investment portfolio.
You will have a tangible asset to do what you want with it (from short to long-term rent, live there, to even sell it right away for a better price); over time, it will always go up according to history.
Even people who have said on numerous occasions that a house is not a good deal are now considering buying one, and it is an investment that will always be there, no matter what technologies or new businesses people make over time.
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Turning ideas into reality. Programmer by profession, Writer by passion. Finance and self-development advice. | Get weekly money advice: https://bit.ly/3pFFWXk
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