Building wealth by adding rental properties to your portfolio is a powerful strategy for achieving financial independence. Because of this, I can’t stress enough how the benefits of investing in real estate sooner rather than later are significant and shouldn’t be downplayed.
Waiting for the “perfect” time to invest can lead to missed opportunities and financial losses, and you’ll never be able to get that time back. In contrast, jumping on the chance to invest as soon as possible can set you on the path to financial freedom, as well as enable you to break the chains that have you bound to your 9-5 job, ultimately presenting you with the opportunity to possibly retire early.
With that said, if you’re thinking about investing in real estate but you’re continually putting the brakes on moving forward for one reason or another, this piece could be the nudge you need to finally take action and move forward full steam ahead.
Getting Ahead of the Game – Advantages of Not Waiting to Invest in Real Estate
The act of building wealth through rental property investments often has a myth attached to it, which is that a real estate investor’s success hinges on perfectly timing the market. This can’t be further from the truth and it often causes investors to put the breaks on purchasing a property. The truth is that the success lies not in perfectly timing the market but instead, time spent in the market, which is why it’s so essential to start your investment journey as soon as you are able.
Other common reasons for stalling include fear, analysis paralysis, the misconception that credit scores and net worth are roadblocks, and so on. Speaking of credit scores, those who have shaky credit will want to watch the following video that will help you understand that your credit score doesn’t define you or prevent you from investing in real estate:
Whatever reason you have for not moving forward, I’m hoping the following points motivate you to seize any opportunities you’ve been presented with to invest in real estate.
1. Investing Sooner Rather Than Later Unlocks the Potential of Time and Appreciation
Real estate isn’t known for its overnight riches, but rather for its steady, reliable growth. Historical trends show a consistent upward trajectory in property values, so by not waiting to invest, you gain the crucial advantage of time in the market.
The longer you hold onto your investment, the greater the potential appreciation, translating to a significant financial gain if you eventually sell. Although, I prefer to hold on to my rental properties to keep uninterrupted cash flow rolling in. I also prefer to use any property appreciation to my advantage by putting equity to good use when I want to invest in additional properties, and we’ll discuss this next.
2. Jump on the Opportunity Now to Avoid Missing Another Year of Equity Growth
One of the greatest advantages of rental real estate is the power of leverage through equity. Equity acts as a financial springboard for future investments, and it’s the magic key to bulking up your portfolio.
First, what is equity? Property equity refers to the difference between the market value of a property and the amount still owed on any mortgages or loans against that property. Essentially, as a homeowner pays down their mortgage, their equity in the property rises.
As mentioned, equity also rises as the property appreciates over time, so you’re basically building equity as you sleep. This is one of the benefits of investing in real estate sooner rather than later, so the longer you wait, the less equity you’ll have down the line. Read about how powerful equity is by viewing this article I put together – Harnessing the Power of Home Equity to Buy a Rental Property.
3. Waiting to Invest in Real Estate Equates to Lost Income and Lost Opportunities
Each month that passes by without investing is a month of lost rental income. Given the current upward trend in rent prices, this could result in a significant amount of income, either lost or gained, depending upon the timing of your actions. If you do wait to invest, imagine the lost potential – income that could have been used to pay down your mortgage faster which translates into more equity to reinvest in another property, which brings you that much closer to your goal of financial independence.
Fast-tracking your investment journey is a wise move, especially with the current market which includes a housing shortage and prices that are expected to continue to surge. With that said, the longer you wait, the more you may have to pay to purchase a rental due to high demand and bidding wars – this is why it’s important to jump on an opportunity as soon as possible.
4. Protect Your Funds Now While Inflation Spirals Out of Control
I’m sure you’re well aware of the harsh reality that the dollar’s worth is on a downward trend, and continues to decrease with every word I type. The bottom line is that it’s obvious the U.S. economy is in bad shape and our financial stability is threatened because of it, and this includes the effects of high inflation.
Inflation chips away at the purchasing power of your hard-earned money, but the good news is that rental properties offer a hedge against inflation. You see, as the cost of living rises, so do rents, as well as property values. This provides a built-in buffer against the weakening dollar, turning a common economic challenge into an opportunity for financial gain.
Power Resources for Real Estate Investors
Be sure to take a look at our resources for building wealth and financial intelligence. They offer insights, investment strategies, and tips for maximizing returns through rental real estate:
- The Financial FreedomAcademy
- Freedom Number Cheat Sheet
- 90-Day Financial Empowerment Bootcamp
Earlier, I made mention of leaving your 9 to 5 job to retire early. If this topic has sparked your interest, then you’ll want to read up on it by heading over to the following articles:
- How to Retire Early Using Real Estate Investing – 35 to 50 Years of Age
- 9-5 Job vs Rental Real Estate: Which Offers More Financial Security?
Don’t Wait for the Perfect Moment – Invest in Real Estate Now to Reap the Financial Benefits
The truth is, there’s never a guaranteed “perfect” time to invest; markets fluctuate, and economic conditions can shift. On the other side of this, there’s never a bad time to invest in real estate because, as mentioned, time in the market is what really matters. However, if you’re thinking that the statement “there’s never a bad time to invest in real estate” is incorrect because you feel that in times of high interest rates, you should hold off – know that you can always refinance once the rates are lower, or seek out lower rates.
Morris Invest Offers Lower than Average Interest Rates
Morris Invest typically offers lower interest rates on our new construction rental property loans. For example, at the time of this writing, the interest rate for a 30-year fixed-rate mortgage stands at 6.94% for single-family properties occupied by their owners and jumps to 8.13% for those purchased as investment properties. However, because we have long-standing partnerships with over 200 lenders nationwide, at this time, we’re able to offer rates as competitive as 6.375% for a 30-year fixed-rate on investment properties.
In addition to this, we often offer time-sensitive bonuses on a first-come, first-served basis, so investing sooner rather than later is a strategy you can’t afford to skip. If you’d like to take the plunge and start investing now, schedule a free call with one of our team members to get the ball rolling. You’ll be happy you did, and once you begin your investment journey, you’ll look back and wish you would have started earlier!
Before you go, dive into the following video that discusses one reason many people don’t take the advice to invest sooner rather than later – analysis paralysis:
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