David Goodnight Austin - Upper hands to investing in RealEstate

David Goodnight on the Advantages of Investing in Real Estate

The advantages of investing in real estate are many. With carefully selected assets, investors can enjoy excellent returns, predictable cash flow, diversification, and tax advantages—and it is possible to leverage real estate to build wealth. 

Real estate investors make money through rental income, any profits generated by propertydependent business activity, and appreciation. Real estate values tend to augment over time, and with a good investment, you can turn a profit when it is time to sell. Rents also tend to rise over time, which can result in higher cash flow.

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Cash flow is the net income from a real estate investment after mortgage payments and operating expenses have been made. A key advantage of real estate investing is its ability to generate cash flow. In several cases, cash flow only strengthens over time as you pay down your mortgage—and build up your equity.

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Another advantage of investing in real estate is its diversification potential. Real estate has a low—and in some cases negative—correlation with other key asset classes. This means the addition of real estate to a portfolio of diversified assets can reduce portfolio volatility and offer a higher return per unit of risk.

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Real estate returns differ, based on factors such as asset class, location, and management.

Still, a number that many investors aim for is to beat the average returns of the S&P 500— what many people refer to when they say, "The market."

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As you pay down a property mortgage, you build equity—an asset that is part of your net worth. And as you build equity, you have the leverage to buy more properties and increase cash flow and wealth even more.

Real estate is commonly thought of as a great investment opportunity due to its ability to increase in value over time. This process, known as appreciation, makes it possible for real estate owners to buy and sell properties for a profit. Property appreciation is also an added advantage to owning rental

properties. Not only will the home increase in value the longer you own it, but rental rates usually follow an upward trend as well. This makes real estate a profitable lasting investment.

Real estate investing is not the only way to invest. There are lots of other investment options available, and each comes with its own set of strengths and weaknesses. Selecting the right way to invest is a personal decision that will differ based on the goals you hope to achieve and the level of work and dedication you prefer to commit to achieving a successful investment. One helpful way to get a better understanding of investment options available to you is to look at what makes real estate investing different by comparing it to other investments.

David Goodnight says that the real estate division of The Goodnight Group has been intricately involved in all facets of the real estate industry; including the purchasing, sub-dividing, rehabilitation, ground-up construction, development and management of all projects. Past Goodnight Group projects have included land tracts, ranches, industrial properties, retail properties, office buildings, and hospitality projects.

As a fully integrated real estate company, The Goodnight Group’s objective of continued property appreciation through high-quality, in-house asset management has remained consistent for over 10 years.