There are many reasons why I believe real estate is one of the best investments on the planet. How many types of investments can be made that allow profits to be earned in the first month and every month after? Profits paid out after all expenses are covered? I’m sure there are a few, but not many. In this post, I will compare of few of the more popular investment choices that are made by the masses.

RE vs paper (stocks, bonds, mutual funds etc)

When you buy a stock or mutual fund, you are betting that the value of that investment will increase. Money is not truly made until the investment is cashed out. There are dividends that may or may not be earned, and if you’re lucky, those can be payed out regularly, but it’s certainly not common. What is much more common is regular, consistent monthly payouts from a properly purchased and managed rental property. This is money that is deposited into your bank account each month after all expenses are paid off. This is money that can be spent on whatever you wish.

RE vs traditional business

This is not a difficult comparison. Most traditional businesses fail. I’m not talking about $0 monthly cash flow…I mean completely fail. If a traditional business owner is lucky, it is still extremely rare to boast profits after the first month. Things to consider: franchise fee, business license, equipment, property costs, maintenance, payroll, utilities, taxes, marketing, opening store orders etc etc. Compare this to buying a fully tenanted apartment building, have them pay all the expenses that come with that building and the balance going into your bank account….30 days after buying the building.

RE vs unique products/wholesaling 

There are a lot of successful people who are developing or wholesaling products. Amazon has made this easier to do than every before. No one needs a garage to store inventory anymore. Profits can be made after 1 month, but it’s not common. Out of all my friends who I know well and keep in touch, I know one (1) person who wholesales or invents products on a regular basis. So this type of investment or business model is either not as easy as IG and FB make it seem (most likely), or not many people know of this business model yet. If you ask most people about rental properties, they understand that the tenants pay the bills and there’s some left over each month for the owner(s). Far more people understand the concept of rental properties. What is not well understood is how to acquire those properties, and that is the knowledge gap I bridge.

Takeaway: Cash in hand is one of the many reasons why I believe real estate is one of the best investment vehicles available to average people. If done correctly, there are 7 ways to earn profits on a single property and one of those profit centers is earning monthly income after all expenses are paid. This is defined as “Cash Flow”. There will be a future post on cash flow that will break down exactly how money is earned each month from a rental property, but I just wanted to first give a short intro on the concept.

If you have questions or comments about this post, please reach out to me at mark@perryinvestments.ca and start the conversation.

Cheers!

Mark