Why You Should Invest in Real Estate

By: Sylvia Smith

Why You Should Invest in Real Estate


Have you been considering investing in real estate but are allowing doubt and fear to hold you back? Real estate is considered one of the best investments in creating financial freedom and wealth for you and your family. Don’t allow fear to hold you back.

Investing in real estate isn’t just for the rich – do you own a home? Given the recent appreciation of real estate you most likely have tons of equity (the difference between what you owe on your home and its market value). Are you aware that you can purchase real estate without using any of your own hard-earned money? Leverage bank money to invest in real estate.

But leveraging bank money to invest is just one of the many reasons to seriously consider investing in real estate.

Here are just a few reasons why investing in real estate is a great way to diversify your investment portfolio and create personal wealth relatively easily:

1. $0 Down – Don’t Use Any of Your Money

Real Estate investing allows you to leverage equity to buy more investment properties

I have alluded to it above. If you already own real estate you can leverage the equity to purchase an investment property without using any of your own hard-earned money. That is right leverage bank money to make money and even better you can write off the interest on this money.


The property appreciates over time and as you pay down the mortgage and/or renovate the property you increase its value. Did you know you can leverage the equity?    The equity in your investment property is the difference between the property’s value and the amount you owe on the mortgage. The difference is your profit. You can normally take out 80% of the property’s value and use it to continue to build your real estate investment property. Hence leverage property equity to make money.    This is a great way to leverage your real estate portfolio without waiting to have enough money saved for the 20% down payment required for the next property.

2. Cash Flow – Tenants Pay Property Expenses

Real estate investing will provide you with monthly cash flow

The beauty of owning a rental property whether it be a short-term or long-term rental is that your tenants’ rent pays the mortgage, insurance, property tax, etc, and what is left is your cash flow. A key benefit of real estate investing is its ability to generate cash flow. The beauty is that cash flow increases over time as you pay down the mortgage and rents increase.


You can use the extra cash to cover your personal monthly bills, save for the future or take that dream vacation, or even better create a larger real estate investment portfolio.


3. Tax Breaks and Deductions

The beauty of owning an investment property is that you can take advantage of many tax breaks and deductions that can save you money when it comes to tax time. You can generally deduct the reasonable costs of owning (mortgage interest and line of credit interest if you leveraged bank money to buy), operating costs, and property management costs.

4. Appreciation

Real estate values tend to increase over time and tend to have fewer fluctuations than the stock market. Real estate investors make money through rental income, and property appreciation. Here is a graph of real estate appreciation over the last 28 years. As a result, real estate is also a great hedge against inflation.

Residential Real Estate Price Appreciation over the last 28 years

5. Great Way to Diversify Your Investment Portfolio


Diversify your stock market investment property with real estate tangible assets to create a more balanced portfolio.

Real estate is a great way to diversify your investment portfolio if you are already invested in the stock market or other risky assets. If your only investments are in the stock market should the market crash like we have experienced multiple times, you could possibly lose everything. But if you invested in real estate you will most likely not lose everything as you have a tangible asset and real estate may actually help you offset the stock market losses.

I am a strong believer that real estate is a great edge against a recession. As the demand for rentals increases during a recession. Plus as we are all aware the Federal government has announced aggressive population growth through immigration which will keep the demand for rental property high for some time to come and hence will most likely place upward pressure on rents which will increase your cash flow.


When buying an investment property make sure you are working with a real estate agent that has first-hand real estate investment experience.


Sylvia started my real estate investing journey over 17 years ago and that is when she realized I had a passion for real estate as a result decided she wanted to help her clients with their real estate buying, selling, and investment journey.

Sylvia Smith is a
seasoned Realtor and real estate investor that has a sizeable real estate investment portfolio and can guide you on the real estate investment journey. Have questions? Reach out it would be Sylvia's pleasure to help.