It’s funny, how in this day and age, when you speak with many women, they would never consider investing in real estate. When I chat with my friends, many of them think that investing in real estate is a great idea, but not for them. It’s too complicated, it’s too expensive, I need to have so much money for a down payment, I don’t see why it’s any better than my GIC/RRSP/mutual fund, etc. are just some of the many responses I get when I ask them why they aren’t investing when they just said they thought it was a great investment idea.
There are so many misconceptions and misunderstandings about how to earn income through real estate and the process of how to invest, that many intelligent, ambitious and financially-savvy women just let the opportunities pass them buy. I find it frustrating, and sad, when I listen to my friends and realize how there are so many women out there selling themselves short due to a lack of information for them. On top of that, the vast majority of investment advice that I could find that was aimed towards women seemed to steer them away from real estate and into paper assets instead.
Until very recently, real estate, and real estate investment in particular, was dominated by men. Women are slowly beginning to turn that around, and the goal of this article is to provide reasons why more women should take the plunge into real estate investment.
- Invest for Cash Flow – many advice on real estate investment is geared towards appreciation only, when in fact the primary reason for investing in real estate should be for cash flow and not for appreciation of the property over time. Cash generated by an investment property can provide an additional income stream while still working, an income stream to allow you to quit your job, a way to build a nest egg for retirement, and / or income during retirement.
- Purchase with Other People’s Money – purchasing a real estate investment property will mean that you will have to make a down payment of some kind. Depending on the situation, it can range from 10% to 25%. Your bank, or mortgage provider than pays the rest of the money for the purchase. This means you are actually using other people’s money to purchase your investment. You can do this with real estate, but not in most of the other investment classes.
- Other People Pay Off Your Debt – real estate investment properties should be generating cash, which comes from your tenants. The rent that is paid by your tenants is what you then use to pay expenses associated with the property and pay down your mortgage. With good due diligence, you can find properties that will generate enough money to cover all your outgoings.
- Less Market Risk – when you’re investing in a property to generate income, you have to worry less about the market. The goal of owning the property is to provide an income stream, so your plan should be to hold it for as long as you want / need to. If the market dips, just keep your property until it goes up again. Increases in property value are just a bonus on top of the money you have already generated.
- Tax Benefits – selling your property in the future could generate capital gains tax, which is always the big red flag help up by those advising against real estate investment. What they forget to mention is all the tax benefits you can use by owning the property and running it as a business. Plus, with the help of a savvy and experienced accountant, there are ways to minimize or even get rid of the taxes associated with your property.
It’s a common fact that there are more and more single women later in life, whether through divorce, or death of a spouse or partner. Owning real estate is a great way to ensure you, and your family, have income and assets that are appreciating. All of this adds up to a convincing case for investing in real estate. Is it hard work? Yes. Are you worth it? Absolutely!