June 2019

Leverage is using borrowed capital (other people’s money) to increase the potential return on an investment. Leverage, if done properly, will significantly enhance your return on investment. This is easy to do if you invest in income-producing real estate but much more difficult, if not impossible, if you’re investing in stocks or mutual funds. In the stock market, it is difficult to leverage your investment. One dollar buys you a dollar’s worth of stock. Whereas, in real estate, one dollar can buy you four dollars’ worth of real estate because the bank will lend you three of the four dollars…

When it comes to real estate, apartments are considered one of the primary property types along with office, industrial and retail. Generally, apartments with fewer than five units are classified as residential property while apartments with five or more units are classified as commercial property. There are many reasons why apartments are considered a great investment. First, they offer the highest returns out of all the real estate asset classes. A recent study found that apartments dominate holding period returns and risk-adjusted returns for 3, 5, 7, 10 and 15-year holding periods. The study analyzed holding period returns during the…

The stock market races forward then lags behind while real estate just keeps moving along year-after year making money for investors. Real estate keeps plodding along yielding solid returns year-after-year while stocks lurch forward when the economy is roaring but get easily sidetracked by world conditions be its trade disputes, rising interest rates or a slowing global economy. Things you have no control over. It reminds me of the Aesop Fable, “The Tortoise and the Hare” by Jerry Pinkney. Once upon a time, there was a hare who, boasting how he could run faster than anyone else, was forever teasing…