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Welcome to this session of grand rounds, a collection of posts I have discovered in the blogosphere and have found of interest and hope you do too.
This offering of Grand Rounds looks at articles from around the web that deal with real estate investing.
There are multiple pathways to wealth.
Whether you decide to stick to your guns and go all in on the stock market or whether you decide to venture into alternative investing options such as real estate, if you make sound decisions you should do fine.
I drank the Real Estate Kool-Aid in 2017 when my radiology partner continued to hit me with all the benefits a real estate portfolio can provide for an investor.
Real estate now represents the largest holding in my portfolio.
Whether you are in the pro-Real Estate or pro-Stock camp, it never hurts to learn about the alternative.
Best thing is that your choice in which asset class to invest in does not have to be an all-or-none approach.
Financial Residency puts these two major asset classes in perspective in, “The Great Debate: Real Estate Investing Vs. Stock Market Investing.”
If you take the hands-on active approach the real estate investing, the biggest factor determining if the property you acquired is a success is if it generating net positive cash flow.
Sure you can still make money if the property has an initial negative cash flow, which is the case for those who buy and flip homes, but it is a riskier proposition compared to those properties that have positive cash flow from the start.
So is there a certain threshold of cashflow you should be looking at when analyzing a particular property?
Financial Success MD says that it is much lower than you think in, “How Much Positive Cash Flow is Enough in a Real Estate Investment?”
I think I can speak for everyone when I say it is amazing to receive a bonus.
Disciples of real estate investing speak highly of all the tax advantages their investments have, one of the biggest is depreciation.
Even though a property might be increasing in value and or generating positive cash flow, you can lock in paper losses by claiming depreciation of the building itself, which in the early years of the investment can be quite substantial.
My motto, inspired by Wimpy of Popeye fame, is why pay taxes today when you can pay them in the future?
Anything that reduces your current tax burden is indeed a bonus as you get to keep more of today’s more valuable dollars to pay later (if ever) with less valuable discounted dollars.
Well guess what, Nest Egg Rx describes this very phenomenon in, “Bonus Depreciation And Other Tax Advantages Of Apartment Investing.”
Depreciation is just one of the many benefits you can take advantage of with real estate investing.
Semiretired MD does a deeper dive in the podcast: “Rich Doc Poor Doc: The Tax Benefits of Real Estate Investing.”
The saying goes that all good things must come to an end.
But does it really have to?
Getting returns on your real estate investment certainly qualifies as a good thing.
So what can you do to ensure that this cash cow does not dry up?
Passive Income MD sheds some light in, “How to Get an Infinite Return Investing in Real Estate.”
Hope you enjoyed the reading material.
Have a great rest of the week.
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