One of the topics I like to revisit over and over is the idea of real estate investing versus real estate speculation.
Real estate investing is the thoughtful approach to building wealth through the acquisition of good, solid properties and then allowing the 4 Benefits of Real Estate Investing to do their thing.
- Cash flow before taxes
- Principal reduction
- Tax benefits
Real estate speculation is the hopeful approach to building wealth as quickly as possible (or possibly losing wealth) through the acquisition of properties “on the come”.
- Your guess could be very wrong about a neighborhood.
- Your guess could be very wrong about the economy.
- Your guess could be very wrong about the rents.
I’m not saying people don’t make money through real estate speculation But it’s more of an “active” way to earn income versus a “passive” way to earn income.
Feel free to call us should you have any more questions about the difference. It’s better to know beforehand what you are getting yourself in to when it comes to real estate purchases.