Many people wonder why they should invest in real estate rather than place their money in the stock market, mutualfunds, gold, silver, diamonds, or any other kind of investment.

Here are the top 10 reasons why real estate is better than all the other options listed above:

Reason #1: The Wealthiest People Are Investing in Real Estate

Yes, it‘s true. According to a recent report by MSNBC, the super-rich invest heavily in real estate, regardless of the market‘s volatility.The reason is simple: Real estate is a proven, tangible asset which will continue to be valu-able, especially as the world‘s population continues to grow. To put it simply: As long as people need shelter, real estate properties will be in high demand.

Reason #2: Stability

As mentioned above, rich and savvy investors place their money in real estate whether the stock market or economy in general is up, down, or stagnant, as the real estate segment tends to remain stable. Even if the price of properties goes down, the drop is not as drastic or sudden as is often the case with the stock market. If the real estate market crashes as was the case in the US in 2008 historically it has been proven over and over again that it will go back to its original value within four to six years. After that, its worth will continue to grow. Real estate rebounds when other investments don‘t because while people can do without luxuries like gold or diamonds, they will always need shelter.

Reason #3: Control

With most investments, you have no control or power over what happens. If you buy stocks or bonds, you are entrusting your

money to the performance of a third party a company to create wealth for you over the long term, but you have zero control over how that business is being run. If you invest in mutual funds, you trust the fund manager to select the appropriate stocks

to create a good return for you. And if you opt for gold and silver, you again have no control over how these commodities will perform on the market. With real estate, however, we can exercise a great deal of control. For instance, we can determine what market we will buy in and what kind of property we will purchase. We can even control the negotiation of the purchase of the property in order to get it at an undervalued price in the first place. But there is more: We can control the condition of the property we purchase. This means that we can buy and increase the value of our real estate holdings by choosing underperforming properties and fixing them up. This way, they will be worth more money than what we originally purchased them for. Our control also extends to the kind of financing we get, how long we choose to own the property, and when and how we choose to sell it. That‘s not all! We can also control what kind of tenants we rent to, how our property is managed, and much more. As you can see, with real estate investments we exercise much more control over our money than with other kinds of investments.

Reason #4: Leverage

When purchasing an income property, chances are we will be using the banks‘ money. We will come up with a down payment of anywhere from 15 to 25 percent of the property‘s value and the bank will finance the rest. This means we are using between 75 to 85 percent leverage on that property. So for a relatively small amount of money 15 to 25 percent of the total purchase price we get to control the entire value (100 per-cent) of that property. No other investment allows you to do that. Typically, if you want to purchase some thing, you have to pay the entire price. If, say, you want to buy one ounce of gold, you must pay for it in its entirety at whatever the current market price is. With real estate, it‘s a totally different story. If we bring in 20 percent down, the bank puts in 80 percent. Yet and this is a huge advantage we control and own 100 percent of that property. We also benefit from all the different profit centers on that property, even though we invested only a small sum. So that is leverage, which is one of the reasons why real estate is so incredibly attractive to smart investors.

Reason #5: Price Flexibility

One of the beautiful things about investing in real estate is that the price is flexible. This means that everything is negotiable

when it comes to real estate investing. Usually, the property‘s listed price is not what an astute investor will actually pay for it. A professional investor will negotiate and get the best deal possible, getting a reduction in the price and/or favorable terms for purchasing the property. This is in stark contrast to what happens with other investments. If you are trying to buy gold and silver, for example, the price is the price. There is no wiggle room, and no negotiations are possible. The same holds

true for stocks, bonds, and mutual funds. The price you see is the price you pay. So real estate investing is attractive because

the price is flexible.

Reason #6: Demand Is Outstripping Supply

In the North American real estate market, supply and demand is in the investors‘ favor. That‘s very good news because in most

markets, the demand for rental properties outstrips the available supply. One of the main reasons for this situation is the cost of constructing new rental units versus what can be charged for rent. Over the last several decades, many apartment buildings have been converted into condominiums, putting an even greater squeeze on the rental markets. This means fewer rental

units and more renters looking for them. So when we choose to buy real estate, the supply-and-demand factor is definitely in

our favor.

Reason #7: Other People Pay for Your Investment

One of the great things about owning rental properties is that over time, our tenants are actually paying for the investment.

How does this work? It‘s very simple. When we buy an investment property, we have to come up with the down payment and

get a mortgage on that property. Then we make monthly mortgage payments to the bank. Fortunately, when our tenants pay us rent, they are actually paying off our loan at the the same time. Any money left over after the loan payment, insurance, property taxes, and other expenses is our profit! So not only are other people paying for our investment, but if we are earning income

from that property, our tenants are also paying us an excellent cash-on-cash return on the investment!

Reason #8: The Value of Real Estate Continues to Grow Even Once You Are Retired

Government-sponsored retirement plans or tax-deferred programs are designed so that the amount of money you receive actually decreases over time. Plus, you are taxed. If you invest in these plans or programs, then when you are elderly and may need extra cash, chances are there won‘t be any money left. Real estate is completely different: the longer you hold on to it, the more money you will end up with. You‘ll pay down or pay off the loan on the property, which will generate more cash flow from the property itself. You also have the option to refinance properties and pull out your equity (by way of a loan), tax-free! So unlike government-sponsored retirement plans, real estate actually increases your net worth and cash flow over time. You may even enjoy some significant tax advantages as well. Isn‘t it important to you to make more money and enjoy a good lifestyle as you get older? This question may sound like a no-brainer, but it all comes down to your investment choices. Real estate allows you to have a good life and actually increase your income as you get older (which is when you will most need it).

Reason #9: Property Is a Tangible Asset

Real estate is made up of land and buildings—tangible, touchable assets. Even if the economy tanked, you would still have the land and the structure as a solid asset. Compare this with other investments like stocks and bonds. These are basically promissory notes put out by a company saying that the company will do its best to live up to its obligations and increase the value of the company. Unfortunately, if something goes wrong as it did back in 2008 the value of the company can diminish very quickly. Or, in the worst-case scenario, the company can disappear altogether, along with the value of your stocks, bonds, or mutual funds. Not so with real estate. Even in bad time real estate would still be an asset, for all the reasons listed above. People will always need a roof over their heads.

Reason #10: You Can Pass Real Estate On to Your Kids

When you buy and hold real estate as an investment, you can pass it on to your heirs. Compare this to a company- or government-sponsored pension plan. Which option do you think is better? You might be able to pass the company pension plan on to your spouse, but that is as far as that will go. Real estate, however, can be passed down from generation to generation. That is exactly what many of the wealthiest families have done and continue to do year after year.

In Summary:

As you can see, there are many reasons why real estate is a better choice for investing than other investment vehicles. The rich put their money in real estate because it is a much more stable investment. It also gives you control over your money, you can use other people‘s cash for massive leverage, the investment continues to grow even when you are retired, it is a tangible investment that fills a basic human need (shelter), and last but certainly not least, you can pass it on to your loved ones. In the next post we will to look into the specific ways you can make money from investing in real estate. You will be surprised and delighted by how many profit centers there are!

“Real estate is the best investment in the world because it is the only thing they’re not making anymore.”

Will Rogers