- Cash Flow: When done correctly - it brings positive cash flow and this is passive income.
- Tax advantage: The country has relatively low taxation on rental income, although the trend on this issue is likely to change. Some countries abroad also have relatively low taxation policies on rental income for individuals.
- Good partners: The bank is your quiet partner, the big advantage is that the bank does not share your profits when the value of the asset increases over time, and also does not bother you.
- Transfer the debt: The renters pay the loan for you.
- Gift property: In another, you can say that the tenant purchases the property for you.
- Gift from a different angle: Even in the case of zero cash flow (Rahmana Litzlan), at the end of the period, you have property purchased by others.
- Money in the walls: The increase in value of the asset can be used by refinancing, thereby increasing the holding of additional assets and increasing the number of assets over the years.
- Self-indulgence: Want to increase her salary? No problem, when renewing contracts you can make a decision that raises a negligible amount of 5-10% Try asking your boss for an increase of 5% per year? In addition, when you recognize an increase of 5-10% in gross wages, you see a lot less because of taxation, in real estate you get the almost net increase in your pocket.
- Future financial security: Tomorrow, if the investor crosses Wanders Road, his successors receive assets that are free of any mortgage (life insurance protector) which is a meteoric increase in their net worth, as well as they receive a higher passive income (no mortgage for any incoming rental).
- Level Jump: Further to the 9 section, when the heirs receive clean assets, it is much easier for them to enlarge the empire, because they have a huge amount of money in refinancing walls and continued asset collection (see section 7).
- Fencing: Multi-assets actually sets us up for a situation, some of which stand vacant, which is particularly frightening for the Maccabees and the Flip people.
- Fun life: You have a two-month vacation, you know what… Take four months in the Maldives, the rent knocks and the income flows, even on vacation.
- Example of the successful: As a rule, most equity and tycoons in any business show that long-term holding is much more profitable and stable than trading. In both stock and real estate.
- Let the money flow: Imagine you have a barn with milking cows, the Exit's rationale says, let's bury the cow, invest in cow breeding, which the cows will grease, and then slaughter the cows to make a profit from the sale of an entrecote.
On the other hand, long-term investing means - wait a minute ... I have a cowshed that gives me milk and that milk brings me money all the time, why sell? Let's just make sure there are more cows and more cowshed, why slaughter dairy cows? That's part of Warren Buffett's value proposition of which I'm influenced. Investment must have continued intrinsic value.
- Psychology combined with vengeful reality: Fast money that comes to us from the exit is addictive, after a few rounds everyone is sure that it will continue to win, and then in weak periods eat the money. In a rental property, the money never ends, it simply continues to flow from the rental side, along with the enjoyment of the value increase (see sections 7 and 8 above), such as the story of a kind of youth.
- The additional aspect of psychological weakness- Exit success is welcome, but successes in many exits can be a problem, for an investor with no iron discipline, the sin of hubris can hit him. Multiple success can lead to a belief in the "gold touch" capability, in assets whose current earnings are mainly due to rental income, have more tranquility by dealing with smaller amounts in daily living, the larger profits we will reap in the future or use the value of the asset to finance new transactions or cash out.
- Kind banks: Banks and financial institutions estimate net worth backed by assets, much more than cash flow. Because everyone knows that cash is much easier to spend and lose than stable assets. That is why banks also easily lend a balance to multiple asset owners.
- Multi Profit Tracks: The rental property has several profit paths at the same time, the Exit property only has the exercise and profit margins.
The avenues of income in the property yield:
A. Rental income
B. Purchase of the property by the tenants - pay the mortgage
third. In Israel, for example, investing in a property also brings in profits in the form of compound interest. According to the past 50 years (well I said I like long term) we see an average increase of 2% per annum on the value of the property consistently, even though there are periods of declines. This, at the end of the deal, increases the capital gains mainly when there is leverage .
D. You can always decide to exercise and also enjoy the value of the property that went up as an exit (at a discount).