Real estate investing is like a three course meal (TM).
It has three profit centers: cash-flow (or the appetizer), mortgage paydown (the main course) and equity appreciation through asset improvements and inflationary rental upside (the dessert). One key question in real estate investing is: how much cash to put down and how much leverage to apply via a mortgage.
The more cash down, the higher the cash-flow in real estate investing.
Is this better though ?
REITs typically use 50% or less leverage and can be good investments for retired income seekers. Or should one be higher levered with more equity upside, but little or no cash-flow ?
Look at these three examples … Then you decide.
Thomas Beyer, President
Prestigious Properties Group
T: 403-678-3330 or 604-564-7673