It’s no secret that I like real estate. Real estate has helped me to grow my net worth and has helped create freedom and independence in my life. What would you do if you didn’t need to go into your job every day? Or at the very least had the knowledge that if you lost your job, you’d be perfectly ok? I try to create multiple streams of income in my life, so that I am not reliant on just one thing. I want the freedom to travel and live life how I want to. It’s easy to write people like me off as “real estate bulls or gold bugs” and risk takers that are forcing the price of real estate up and making it hard for the average Canadian or American to buy a home. The reality is that real estate is one of the few ways that the average citizen can create freedom and independence in their lives and investors are largely creating value and adding rental units which helps to re balance supply and demand. Here are some strategies and reasons why real estate is the perfect addition to the portfolio of someone who craves freedom.
Cash now or later? - If you are looking at buying real estate to create freedom in your life, you need to identify your goals. Do you want monthly cash flow now or are you looking for a long-term pension fund? Maybe a combination of both? Cash flowing residential real estate can provide monthly cash flow, equity growth through appreciation and mortgage pay down, as well as tax efficiencies at the end of the year. You need to figure out how that fits in your life.
How busy are you? - Do you have the time to research and understand trends to identify good areas and find good deals? Do you have time to manage real estate properties and tenants? You don’t necessarily have to do any of this to become a successful investor. You just need to leverage other people’s time. Find a partner or professionals within the industry to guide you and help you along the way.
Travel time - I want to travel and explore the world and not be tied down to my phone worrying about maintenance calls. We buy real estate to create freedom. So we must set up systems to deal with those complaints and issues in a timely manner without impacting our lives. Maybe this means hiring a property manager or having someone at home to deal with things as they arise. Don’t be that guy hiding behind a palm tree trying to get contractors on the phone to fix a leaky faucet.
What does freedom mean to you? - To me, it means being able to catch a flight or go on vacation. It means having the ability to take time off to hang out with family and friends and the ability to get away from the rat race for a while. It means doing what I want to do and working on projects that I am passionate about.
What is money? - What is money good for, if not to buy you the freedom to do what you want? As inflation, rising costs and more taxes takes larger and larger bites out of your income, what do you need to do to offset some of these pressures? What can you put your money in that at least keeps up with inflation and can provide you value over the long term? Good real estate and hard money such as gold and precious metals can help to offset some of these things.
What Is Your risk tolerance? - Real estate doesn’t fit in everyone’s portfolio. If you don’t do the research and you’re comfortable with the returns you’re getting, continue. However, keep in mind that real estate is one of the few asset classes that the banks like so much that they are willing to lend on it. They don’t even lend on their own stocks. Real estate becomes risky if you have a short time horizon, you didn’t do your due diligence when you purchased, or you have insufficient knowledge to do what you’re trying to do. Luckily, all these risks can be very easily mitigated.
Personal growth - Real estate is a driver of personal growth. Each property you buy is a business in a box. Real estate investors need to be organized and efficient with their time. They need to set goals and go for them. They need to have entry and exit plans, growth targets and strategies. They need to be adaptable and coach-able. They need to be leaders and thinkers and conflict resolvers. All these soft skills spill over into other aspects of your life and can help you to become a better speaker and thinker. These skills enable you to find and create the freedom you need in your life.
Saving for your kids education - If you have children, you are probably putting money into an RESP every month to pay for their future education at college or university. What if you bought a rental property that generated monthly income to pay for that? If the property is by a university, they could even move in there when they are ready and have their living expenses covered. Free education anyone?
Freedom in retirement - If you look back at what real estate prices were 40 years ago, you probably wish your savings had grown that fast. Real estate is a perfect way to save for retirement. The big thing here is that there is forced savings in equity growth and mortgage pay down that you don’t see and is locked away until you sell. Why not buy a few properties today, sell one at retirement and keep one to provide some monthly income? Immediate freedom to travel or do whatever you wish.
Freedom to live life exactly how you want! - This is self explanatory. An understanding of the credit system in North America, what constitutes money and what you can do with it, and an understanding of leverage in real estate can provide you with lifelong freedom to live authentically and be just you!
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I'd love to hear your thoughts on this! Have a great week while working past those obstacles on your climb to success. Let's Grow Together!
Jonathan Beam
Real Estate Investor and Entrepreneur
Jonathan Beam is a real estate investor in the Niagara region who is passionate about helping you achieve financial freedom through real estate. He works with new and experienced investors to formulate a plan that fits your specific situation and provides market guidance and consultation on the best places and strategies to pursue within the Niagara Region. Book a free, half hour no obligation consultation to see how he can help you to achieve your goals. His travels are available at www.realestateandrepeat.com
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