Is Real Estate a Good Investment?

Is Real Estate a Good Investment?


Is buying real estate
a good investment? That’s today’s video. Let’s dive in. Hey everyone, I’m
Clayton Morris. I’m the founder
of Morris Invest. We are a turnkey
real estate company. I’ve rehabbed
thousands of homes. And we have hundreds of
investors all around the world. And today we’re going to
talk about whether or not real estate is a
good investment. Now I’m a little biased,
but I’ve certainly gone through the
ringer with a 401(k) and all sorts of
other investments throughout the years. Stocks, gold, silver, you
name it, I’ve done it. And the thing that has
made me and my family wealthy, and being able
to hit a high level of cash flow every
month and net worth, is real estate investing. Now I’m going to break
down five key areas as to why I believe
real estate is a better investment than just
about anything out there. But first, let me
lay the groundwork on why I think real
estate investing is a smart investment. I believe real estate,
when purchased correctly, can be one of the highest
performing assets that we own. Remember, you cannot possibly
get rich by just hoping that your money in a savings account
is going to grow to create wealth for you and your family. It’s not going to happen. Instead, real estate
enables someone to create monthly cash flow. Assets that are
producing cash flow. And we’ll get to
that in a second. You ready? Let’s dive into
the five key areas and why I think real estate
investing is one of the safest, best investments you can make. Number one is net worth. I read a book a
number of years ago, Gary Keller’s great book,
The Millionaire Real Estate Investor. And in it he made a
really great point. He said, rich people know
something that other people don’t. Rich people understand
that it’s not about how much money they
buy, or sell, or trade back and forth that makes them rich. That increasing their net
worth was all that rich people cared about. That when they looked
at their spreadsheets and they saw that their assets
versus their liabilities, were their assets growing
year after year after year, and were their liabilities
shrinking year after year after year. That’s your net worth. How much are you worth. And with real estate
investing, the beauty of real estate investing is
that when you buy a $60,000 home and you’re buying it below
market value, which is what we talk about here on the channel. We have a host of
videos on exactly how to buy real estate correctly. And you buy it for $60,000,
but it’s worth $80,000. Or you buy it for $50,000,
and it’s worth $55,000. That you’re increasing
your net worth not just by the $50,000
that you just purchased, but by the $55,000,
because you’re buying it with a little bit
of equity in every property that you buy. You’re adding to your net worth. Your net worth has now
increased by $50,000 by owning real real estate. That’s number one, the power
of increasing net worth with real estate investing. Number two, and
perhaps my favorite of all– well actually a few
of these are my favorites, but I love number two,
which is cash flow. Of course, the reason we’re
buying rental real estate, we’re holding it,
we’re renovating, and we’re placing a
tenant in the property. That’s what my company
does all day long. Is because now we are getting
cash flow from that tenant. We’re turning that money that
we had sitting in that savings account. Let’s just say you had $40,000
sitting in a savings account. Well what if you could buy a
single family home for $40,000. That’s what I do. Those are the homes I buy. Right in that $40,000 range. Three bedroom, one bath. Now instead of that
$40,000 sitting in my bank account doing nothing for
me, that $40,000 is now creating cash flow every month. Bringing in money. $700 a month from a tenant. Month after month,
year after year. That is the beauty of cash flow. Because now think about it,
my money is working for me. So if you ask me the
question is real estate investing a good investment. Absolutely. Can you name other
investments that do that, month in and month out. Sure you can take
dividends from stocks. But that is sporadic, and that
can go up and down obviously with the market. Real estate investing,
if done correctly, has very little
fluctuation, if any. If you’re in the
neighborhoods that we are. I have a whole video on why I
buy in C class neighborhoods. You should click on that
button and watch that video. You’re not going to see
variations in your rent very much. So $700 a month in rent
on a particular property. In a down economy,
what are you going to lower the rent to $675? No. Maybe, but that’s $25. Big deal. You’re still going to see
consistent cash flow, even in a down economy,
if you’re purchasing real estate correctly. Number three reason that real
estate is a good investment, appreciation. Now I don’t invest
for appreciation. To me it’s kind of dead as
a main investment vehicle. But to me it’s
icing on the cake. Now in the neighborhoods
that I buy, we’re seeing about a
2% appreciation year after year, which is nice. Nice little bit of appreciation. That means the asset that
I purchased for $50,000 might be worth
$52,000 in a year. Might be worth $53,000. Might be worth
$54,000 or $55,000. And it goes up and up and up. But the beauty of it is that I’m
not investing for that reason. But I’m increasing my
net worth by really doing nothing year after year. Now my net worth is going
up, because the property has appreciated. Third great reason to
invest in real estate. Number four is taxes. Now I said that cash flow
was my favorite thing about real estate. I have to say I
think taxes may even be just as good as cash flow. Because once you become
a real estate investor, you realize why you’re paying
almost nothing in taxes. That’s because of real estate. That the tax code
in this country is written for real
estate investors. To save on your
taxes, the purchasing of rental property
and the improvements that you make to that
property are a tax write-off. And that will mitigate
all of the other income that you have coming
in in your life. So when I have rental
income from those tenants, that’s offset by the
purchase of real estate and all of the expenses
and depreciation. All of the things that
you can then leverage and use to mitigate your taxes. That is why it is such a
powerful way to create wealth in this country. That most members of
Congress, I always say this, are real estate investors. They’re the ones that
have written the laws. And the tax code in this
country, more than anything else, benefits real
estate investors. And those, not who flip
properties, but those who hold properties,
experience the highest level of tax advantage
in this country. Holding rental real estate
creates an incredible influx of cash and ability
to mitigate that cash with tax incentives, tax
depreciation, and all sorts of write-offs that
you just don’t get in any other
sector of this economy. So number four, taxes. I love it. That’s another reason why real
estate investing is a fantastic investment. And number five. The fifth reason that I think
real estate investing is one of the best tools out there,
is because real estate never hits zero. That’s right. Think about the stock market. Think about all of those people
that lost tens of millions of dollars in their 401(k)s. And it took 10 years for
the economy, their 401(k), to go back to where it
was 10 years before that. 10 years and they
had no growth at all, because they had to wait
for it all to bounce back. In the stock market
stocks can hit zero. Things can show up
with zero value. Real estate does not. Real estate never goes to zero. Ever. Even if a house burns down– OK, now you’ve got
insurance on the property– but even if a house
burns down, even the land is still worth a
good amount of cash. Even in that situation, real
estate does not go to zero. So yes, you might
see some fluctuations in the market from
time to time, based on values in the marketplace
and if we’re in a recession. But remember, we’re
investing for cash flow. So it’s OK if the
value of a property you bought for $50,000,
drops to $45,000 or $42,000. That’s OK. You know why? Because the tenant is still
living in the property, producing you cash
flow every month. And yes, the equity
dropped a little bit, so your net worth
drops a little bit. But that’s going to bounce back. But it will never
go down to zero. So five great reasons why I
believe real estate investing is the safest, smartest,
most lucrative way to build wealth in this country. We have a whole series of
videos on how to create wealth using rental real estate. Just check them out here. We have a ton of playlists to
help you take action and become a real estate investor. And if you’re ready to buy
your first rental property. And you want to work with
a professional team that knows how to do it, and can help
you get your first property up and running, where you
don’t have to do anything, because we do it all,
just click on the link below and book a call with
our team at Morris Invest. It’s a 30 minute consultation. It’s totally free. We’ll talk to you about
your financial goals. How many rental
properties you want to acquire in the
next few years. And we’ll take care of the rest. And do the rest for you. I’m Clayton Morris. We’ll see you back here
next time everyone. Now go out there, take action,
and become a real estate investor.

12 thoughts on “Is Real Estate a Good Investment?

  1. As usual, a great educational video. Thanks alot for combining those reasons. Maybe other people would thing we know all that, but I believe we need that from time to time as a reminder & motivation. Can't wait for my call on May 1st.

  2. You are my new hero

  3. what are the main differences in owning real estate properties under your name or under an LLC how much different in taxes

  4. Just have a question for you. I am a Canadian thinking about investing in the US real estate market around the Gulf States. The reason , our real estate market right now is in a bubble right now. Anyways, my question is can a foreign invest in real estate in the US? Can I as a Canadian buy, hold and own rental properties in the US?

  5. Video Request: "Top_____ways to purchase a realestate investment"

  6. I have scheduled a call with your team in May. I just have a couple of questions. Can you really get a monthly rent of $700 on a $40K property? I've also come across HomeUnion and their website lists several properties including some in Indianapolis. None of their properties are in your 40-50k range. They're much higher for a C neighborhood. Any thoughts on that? Thank you in advance.

  7. Hi Clayton, how long is the eviction process in Indiana, and also the total cost for that, including the attorney? Also has that been factored in the 40% of the $700? Thank you for your time. I have been enjoying your podcast and videos. God Bless.

  8. Where's your wife? The two of you together are so funny to watch!! Plus she seems to really know her stuff. I've got kids too, get them on the camera, we don't care. Maybe I'm biased because I'm a mom. 🙂
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  9. Question:

    I live in the road for work, I'm in the 40% Bracket and don't have any write offs, so I want to buy a property and rent it out through a property manager, do I buy it as an investor or homeowner and what percent to I put down ?

  10. oh my God!!! I love you!!! SUSCRIBEDDDD!

  11. You are grossly exaggerating the
    volatility of the stock market. It didn’t take anywhere near 10
    Years for buy and hold investors to bounce back. The S&P 500 never drops to zero either.

  12. I already book a call coming up in April 11th.

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