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Welcome to my InvestInIndy blog site. I've created this blog to keep investors up to date on all the latest happenings in the Indianapolis real estate market. Here you'll find timely information on local market trends, articles of interest, upcoming events and our latest cash-flow deals. So be sure to subscribe so you don't miss a thing. And don't forget to share your comments.

Thursday, September 27, 2012

3 Reasons Real Estate is a Better Investment than Stocks

In the current economic climate, most people are struggling with where to put their money that will give them a decent rate of return and prepare themselves for retirement. Most IRA's and 401K's took a beating in the crash of 2008 and have yet to return fully to their levels of 4 years ago. Compounding this problem and making retirement a bleak prospect for many, the Dow Jones is no higher than it was 12 years ago. This means that if your 401K or IRA has matched the performance of the Dow, your retirement account is worth no more than it was over a decade ago. There's no question that real estate was severely impacted by the recession of 2008 also, but I'm going to share 3 reasons why I think real estate is a better investment in the long haul.

1. Better Return on Investment

The chart to the left shows how stocks have performed compared to real estate since 2000. With a 43% return rate, real estate has clearly outperformed all 3 major stock indexes

2. Cash flow

Real estate returns are made up of both equity appreciation and cash flow from rental income. Unlike stocks, real estate still produces returns through rental income even if there is a devaluation of the asset.

3. Leverage. By financing real estate, an investor can achieve high rates of return on a small amount of their own money. For example, a $50,000 investment in stock with a 5% annual rate of return will generate a gain of $13,814 over 5 years. An investment property acquired for $50,000 that appreciates 5% will generate the same $13,814 gain, however since the real estate was acquired with financing and a $10,000 down payment, the cash on cash return over 5 years is a whopping $138% and that doesn't even include the rental income generated during that time.

Most financial managers and fund managers recommend stocks because it's what they know and what they get paid on. If you're not satisfied with the performance of your retirement fund and want to explore the world of real estate, check out our website to see how you can get started,

How to Invest in Cash-flow Properties


Tuesday, September 11, 2012

Let Someone Else Fund Your Retirement Account

That's exactly what you're doing if you hold cash-flowing real estate in a self directed IRA. All the rental income goes straight in to your IRA so your renters are funding your retirement account--Not YOU!
 
Many people don't know they can invest in real estate through their IRA, but it is nothing new. The IRS has allowed it since IRA's were created in 1975. Wall Street just doesn't want you to know it since they would rather sell you equities.
 
The Dow Jones is no higher today than it was 12 years ago which means that if your retirement account has kept pace with the Dow, you're no further along today than you were a decade ago! At that rate, will you be able to retire when you want or will you be like the 54% who have to rely on social security and family to make ends meet?
 
 3 Advantages of Owning Real Estate in your IRA:
 
1) Outperforms the Stock Market
 Rental property will easily produce a 12-14% ROI. The Dow Jones has grown only 1.8% per year for 10 years.
 
2) Tax Benefit
All income and appreciation on real estate held in your IRA is tax deferred. Just like any other traditional investments in your IRA, the profits from your real estate holdings will be tax deferred.
 
3) Inflation Hedge
The problem with most traditional investments such as savings, CD's, stocks and mutual funds is that they are not even keeping pace with inflation. The 2012 inflation rate is running at 2.2%. As seen above, the Dow is returning only 1.8% and the S&P is only averaging a measly .43% over the last 10 years while inflation has averaged 2.4% in the last 10 years. Clearly, if your retirement account is not significantly outperforming the financial markets, your futture retirement is being eaten up by inflation. With 12-14% returns on real estate, you will far outperform inflation.
 
It doesn't take a lot to invest in real estate.

If you have just $15,000 in your IRA, you can own income producing real estate that will give you a 14%-16% return.
 
See how you can accelerate the growth of your retirement account.

Download "8 Best Kept Secrets About Investing With Your IRA" from our friends at UDirect IRA Services and learn how you can take control of your IRA today.
 
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