Real estate investment : use the leverage effect
On Publish0x and read.cash, most of us are used to speak about cryptocurrencies and blockchain. I consider myself being a part of these people, but that's not the only subject that's interesting me. Indeed, crypto isn't the only investment I read about, and I think diversification is the key to reach its personal life goal. Mine is being financially free and that's why I'm also interested about the real estate investment. It might be important to add that I just purchased my primary residence with my savings and by contracting a little loan. Why ? In order to pay off a debt less important than my past rent and building my patrimony (plus having a better lifestyle).
But now, let's talk about the real estate investment by renting an apartment or a house.
Use the banking leverage to make money
Let's explain by a very simple way what the banking leverage is. In fact, is is the power to use the money the bank is lending to you in order to become rich. How ? It is very simple, by renting your real estate, which will pay back your loan. If we assume this operation is self-financing (with no cash-flow), you may think you do not win money, and you're wrong. Indeed, imagine you sell your good after three years (with no capital gain compared to the prize you bought it), you fully pay back your loan and you will have a three year renting capital gained. To resume it with one sentence : the leverage effect is making money with the capital of the others : buying with the bank capital, paying your loan with the tenant capital.
Diversification is the key
As I already said, most of you are probably interested in crypto here much more than real estate. But a good investor must not forget that diversification is the key : cryptocurrencies, stocks, real estate, maybe even other things such as fields, vines ... etc. If you can understand what I told wrote between the lines, you can invest in real estate with absolutely no money. Of course, you will need income in order the bank to trust you, but technically, you can invest with zero capital. Plus, the real estate market seems not to be correlated with the financial markets, so that's more or less a security to invest in this sector. This investment could also put your children financially safe for their whole life, and that's something you shouldn't be underestimating.
And you, have you ever invested in real estate, and will you do it in the future ?
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