If you refinanced recently and took out equity, there are opportunities to reinvest that money into an investment property to build your real estate portfolio and diversify your investments.
Real estate offers a unique advantage relative to other investments as you can leverage or finance the investment. Leverage allows you to enhance your return on equity. For example, if you buy a $500,000 investment property that appreciates at 5% per year and you put 20-30% down or $100,000 to $150,000, after 5 years your annualized return on equity is 18.4% and 27.6%, respectively.
While there are many other factors to consider, such as rental income that can be generated, tax write-offs, maintenance expense, annual break-even cash flow, and more, the idea of investing into real estate should not be written off. There are ways to invest with others through investment funds, setting up a real estate partnership, and more.
Learn more about investing in real estate through our Invest section of our website.
Recent Comments