Investing in real estate is a tried-and-true strategy. And if you do your homework and surround yourself with reputable experts, you can make a lot of money. The Best Small Business Idea: Real Estate (and the Best Way to Work from Home)
1. No Extra Fees
The majority of new businesses need startup money so you may buy all the equipment as well as office, retail, and/or manufacturing space. On the other hand, real estate investment may be done from any location using simple gear you already have at home, such as a smartphone, computer, and perhaps a desk and chair.
2. Lack of Stock
When you buy and sell real estate wholesale, you don’t hang onto anything; instead, you identify bargains and then sell them at a profit to another investor. The time frame is greater if you are repairing and flipping, however you will probably need transactional financing (a short-term loan) to finance the transaction from buy to sale (with no credit check or income verification needed). And if you do acquire stuff, it is bringing in money for you.
3. Variable (often Minimal) Cash Need
You don’t need any money (or credit) at all to engage in wholesale business.
You’ll have more money in savings the more sales you close. You may choose to acquire and hold properties at that point to generate passive income. You may utilize transactional financing if you are repairing and flipping.
4. No Workers
Although there is no law against it, full-time staff are not necessary for success and may even get in the way.
According to CNN Money, a worker you hire for $14 per hour would likely cost you more like $20. Salaries, payroll taxes, benefits, retirement plans, paid time off for illness and maternity leave, trainings, conferences, and certifications; office perks to keep morale high; and employee turnover expenses are all included.
But if you’re a real estate investor, you can just employ consultants, contractors, freelancers, and interns.
5. Resistance to inflation
Rents rise when economies develop because of the increased demand for real estate, which raises capital values. Real estate is also able to preserve its capital buying power by reacting to inflation by shifting part of the burden onto the tenants and absorbing the remaining amount via capital growth.
6. Resistance to deflation
Real estate investors, particularly those in rental properties, were able to withstand devaluations even during the 2006 market meltdown, unlike stock and bond holders. In actuality, demand rose as a result of individuals losing their houses to foreclosure and the rental market growing. While prices rebounded, rental investors kept onto their inventory and continued to generate money.
7. Tax Benefits Real estate investors, particularly those who engage in long-term rentals, have access to a number of attractive tax benefits, in contrast to those who invest in more conventional asset classes.