Hey everybody, how are you? Hope you’re well. So, before we get started, do me a favor Today, we’re going to talk about Why Real Estate May Not Be the Best Business Model, but before that, I want to briefly talk about what’s going on in the news.
In the news, the iPhone and computers have become exempt from the tariffs. This is good news for those who invest in tech stocks—think Apple, Nvidia, and Microsoft. So, the iPhone and computers have been exempt from the tariffs, and this is the latest news.
Real Estate vs. Business
Now, let’s dive into why real estate is considered a terrible business model. When we look at the actual numbers, the comparison between buying real estate and buying a business is stark. Let’s say we purchase a property for $150,000, for example, a single-family home. On average, that’s going to net you around $300 a month per door.
Now, compare that to buying a business. If you purchase a business for $150,000, it can net you anywhere from 10% to 30% in revenue. If it’s 30% revenue, that would be $3,750 a month. So, comparing $3,750 a month from a business versus $300 a month from real estate, the business generates far more cash flow.
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Real Estate vs. Business: The Long-Term Play
However, real estate isn’t all bad. It’s still a good idea to buy real estate—better to own real estate than not buy it at all. Why? Because real estate is a hard asset. People will always need a place to live. A lot of millionaires have gotten wealthy by acquiring real estate. So, while a business may generate more cash flow, real estate is more of a long-term investment. You’re building wealth over a period of time. That $300 a month from a single-family home may not be much now, but it’s a long-term play.
It’s important to think about what kind of real estate you plan to invest in to get more value. For example, single-family homes might not generate the best returns unless you focus on strategies like midterm rentals, sober living, or even multifamily properties. Sober living, for instance, can generate about 10 times what you’d get from a single-family home, and midterm rentals can give you about three times the return.
The Case for Real Estate
Real estate is where people store their money. There are many who have become financially free from buying real estate. They never have to work again if they don’t want to because, after purchasing enough assets, their income from those assets covers all their liabilities.
When comparing real estate with a business, it’s clear that businesses tend to generate more cash flow. However, real estate has its place. It’s a slow and steady wealth builder. It’s not going to make you rich overnight, but it will build wealth in the long term.
Appreciation and Equity Play
Another point in favor of real estate is the potential for appreciation. By holding on to a piece of property, you can make $100,000 out of thin air just from appreciation. Of course, this won’t happen overnight, but the equity you build by holding property is a huge advantage.
So, while businesses may provide more cash flow, real estate is building wealth slowly and steadily. This is why it’s important to consider both. Some people may not be interested in real estate, and that’s okay, but for others, it remains a viable path to financial freedom.
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Conclusion: Do Both or Neither
At the end of the day, both real estate and business have their merits. If you’re looking for more cash flow now, a business may be the right choice. But if you’re looking for long-term wealth and financial freedom, real estate is still a strong contender. Choosing the path that suits you best is essential. If you’re unsure, it’s better to do both—real estate and business—rather than do nothing at all, as many people do
So, that’s all for today. If you like the channel, hit that like button. If you’re not a subscriber, hit that subscribe button and notification bell so you don’t miss future episodes. If you’re interested in buying real estate, check out the pinned link below to join the waitlist for the real estate group.
Lastly, check out the hat collection below. When it comes to making money, it’s all about selling. Many people try to sell you things, and it’s essential to look at what they’re selling and how they’re doing it with integrity. This hat collection represents more than just hats—it’s a mindset change.