As you continue to build your wealth and look to grow your nest egg for your eventual retirement, chances are good that you have considered a bevy of different investment options and opportunities. Whether you have thought to invest in blue-chip stocks, play it a bit riskier with growing companies, or even looking into purchasing cryptocurrency, there is no doubt that you are exhausting all your options.
With that being said, one investment opportunity that you might not have looked into yet is to buy an investment property with cash then refinance the property to improve your cash flow and equity. If you are interested in learning why purchasing an investment property is such a smart decision, then you have absolutely come to the right place.
Let’s break down the major factors together.
Interest rates remain low
Interest rates have been historically low ever since the 2008 economic recession and they continue to favor investors in a big way. While your interest rate will depend on multiple factors such as your down payment, your credit score, and your debt-to-income ratio, you can be sure that it will be much lower compared to other years.
You will improve your cash flow
One of the top benefits of owning an investment property that is a commercial property, such as an office building or workspace, can dramatically improve your long-term equity as well as your monthly cash flow. The obvious reason for that is because your tenants will have to pay their monthly rent.
This influx of cash flow will allow you to make payments such as paying down your debt or making other investments to further increase your net value and expand your portfolio. On top of that, you are also reaping the benefits of the steady increase of value for property values so that if you plan on selling your investment property sometime in the future, you can be nearly guaranteed to make a decent return on your initial investment.
Create leverage to purchase more property
Another great aspect of owning an investment property is that as long as you consistently pay down your mortgage, you will continue to build equity and leverage with the bank that lent you the property loan. You can then use that equity and leverage to potentially purchase even more property. This could mean purchasing a vacation home in an attractive location, another commercial property, or something else fantastic.
As you can see, investment properties offer many different facets of value to the owner. Whether you are looking to purchase a home, an office building, or an apartment, you can rest assured that your value will build upon itself as the years go by. This will not only help you now, but it will also help you and your family in the future as well