Page 298 - Why We Want You To Be Rich - Donald Trump, Robert Kiyosaki.pdf

292 I CHAPTER TWENTy-SIX

In addition to control, real estate offersmany other advantages. If a piece
ofreal estate ispurchased at the right price, is financed well, is in a good area
and is well managed - then some of the advantages of real estate are the
following:

1. Cash flow: Checks come in every month.

2. Leverage: Bankers will line up to lend you money for investing in
property. Ask your banker if he or she will lend you money to buy
mutual funds.

3. Amortization: Tenants payoffthe debt.

4. Depreciation: The government offers tax breaks for real estate
because it goes down in value. Real estate can go down in value, but
it tends not to. In reality, the reason why governments offer
depreciation incentives is because real estate investors provide
housing.

5. Creativity: The value ofthe property improves through creativity.
For example, if! buy a piece ofraw land, I can change the zoning. Or
I can buy an old house and fix it up. Or I can convert an apartment
house to condominiums.

6. Expandability: Once I learned how to buy single-family homes, I
expanded into multiple units. Today, when my wife and I buy a
property, it needs to be at least 250 units.

7. Predictability: It takes about a year after purchase to stabilize an
apartment complex. After a year, the management is able to get rid
of bad tenants, make the cosmetic repairs that good tenants want,
and we can sometimes, slowly,raise the rents.

Once a building is stabilized, the checks come in every month like
clockwork. This certainly beats watching the ups and downs ofthe
stock market ... feeling good when prices go up and feeling bad
when prices come down. I like my monthly checks in the mail.

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WHY WE WANT You To BE RICH