Here are a few: 1. Appreciation“The rising of home prices over time, is how the majority of wealth is built in real estate. This is the ‘home run’ you hear of when people make a large windfall of money. While prices fluctuate, over the long run real estate values have always gone up, always, and there is no reason to think that is going to change. 2. Leverage“By nature, real estate is one of the easiest assets to leverage I have ever come across—maybe the easiest. Not only is it easy to leverage the financing of it, but the terms are incredible compared to any other kind of loan. Interest rates are currently below 5%, down payments can be 20% or less, and loans are routinely amortized over 30-year periods.” 3. Paying Off the Debt“One of the best parts of investing in real estate is the fact that … you’re slowly paying down your loan balance with each payment to the bank… After enough time passes, a good chunk of every payment comes off the loan balance, and wealth is created.” 4. Forced EquityForced equity is a term used to refer to the wealth that is created when an investor does work to a property to make it worth more… Bottom LineGreen put it best by saying: “There are many ways to build wealth in America, but real estate might be the safest, steadiest and simplest way to do so.”
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