Explore how real estate generates long-term riches and benefits that persist beyond one’s lifetime. This course investigates the lasting value of real estate, revealing its potential as a source of generational wealth. Join us to understand its principles and advantages in the upcoming sessions.
Welcome to the next lesson.
Introduction.
So real estate has long been known as a generational wealth creator and driver, and there are numerous benefits to owning and investing in real estate. Like we mentioned in one of the prior lessons, but believe it or not, some of these benefits actually continue to pay dividends even after you pass away. And so real estate quote unquote pays the owner in four separate and distinct ways, I would say. The first is cash flow. And we’re going to get into what that is in a coming lesson. The second is appreciation, which will also be defining. The third is loan paydown, if you’re using a mortgage or some kind of debt. And the last way that rental real estate pays the owner is via tax benefits. We’re going to go in-depth into how to understand, calculate, and utilize all of these in future lessons. But for now, I just want you to know that they exist and that they all compound together, to provide some really unparalleled return potential for owners. I think that there’s this misnomer out there around investment real estate. And when many people think about single-family homes, they’re really only thinking about it as their primary residence. I would say this is a fundamental flaw. I also used to think that investing in real estate was only for the ultra-rich or greedy or the greasy slumlord, but this just isn’t the case.
I want everyone to think about every rental that they’ve ever lived in or knew someone of living in. Every single one of these properties was owned by someone else who was likely making a little bit of money each month off the rent. And that’s what we would call cash flow. It’s the money that you clear from a property after you paid all of your expenses, paid all of your mortgage, and you get to pay yourself a little bit something.
And all of these owners, the people collecting rent, if they weren’t making actual cash flow, they were probably building up equity in the property and that the property was appreciating in value, and they were also paying off a little bit of their mortgage each and every month. So they were kind of buying themselves a little bit of equity. And really you as the tenant or as the renter, we’re the ones that are actually buying that equity for them. And many of these owners are likely not rich or greedy, but simply understood the power of rental real estate and decided to jump on board.
So again, we’re going to get into these four benefits and these four ways that real estate pays us in just a minute here. And we’re also going to be defining them and talking about them throughout the rest of the academy. So wanted to introduce the concepts here, and we’re going to be taking a deeper dive here in just a minute.
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