Imagine that you are looking to buy a business and happen to find one that has appreciating value, (almost) guaranteed cash flow, and the ability to contribute to your retirement savings. More than that, it’s also priced at a relatively low cost considering its overall value. Isn’t it safe to say that if the conditions were right, you would buy it?
Of course, the business I’m referring to is a rental property. In my opinion, it’s one of the very best types of businesses to invest in, no matter how big or small your investment is. Even if you own just one rental unit, you can enjoy all the benefits I mentioned without engaging in some of the risk (or headache) associated with buying a different type of business. For example, after you get a rental property up and running, it typically requires little oversight moving forward, and you can easily work another job or handle other responsibilities as your property appreciates in value. A typical business, on the other hand, often requires incredible and constant effort over a long period of time. Also, unlike some other businesses, rental property is not seasonally oriented or threatened by cycles and/or new inventions. Housing will always be needed and can never be replaced by virtual domains or emerging technologies.
Another benefit of rental property is the three different ways it can make money. In his book Rich Dad, Poor Dad, Robert Kiyosaki outlines these three avenues:
- Monthly cash flow
- Long-term appreciation
- Investment payments made by tenants on your behalf
This three-fold benefit, as well as the other benefits I mentioned (and countless others), is hard to beat. Below are some stories of people I know who have experienced these benefits firsthand and have built their own legacies through real estate investing.