Sutherland, CFP, says real estate can diversify your income, produce near-immediate results, and help you become financially independent sooner.
According to Brent Sutherland, a certified financial planner, real-estate investing is a decidedly "non-traditional" method for building wealth, but a powerful one nonetheless, he wrote in an article published on CoachCarson.com.
When he was 35, Sutherland bought his first single-family home to rent out for income. Now, less than five years later, he owns eight additional properties, plus part of a commercial real-estate project that involves four apartments, a garage, and 10 mobile homes.
After becoming a real-estate investor himself, Sutherland left traditional financial advising to coach clients on his own. The reason why he says, is that the way advisers are paid, trained, and regulated generally inhibits them from recommending a non-licensed product like physical real estate to clients.
"How could I sit across the table from someone and talk to them about a financial roadmap and investment strategy that I was not following myself? I became professionally and morally conflicted. And that is why I ultimately branched out," he writes.
Here's why Sutherland believes real-estate investing is a valuable tool for building wealth:
1. Real estate diversifies your income
It's a common habit among financially successful people to develop and maintain multiple income streams.
"While it is certainly important to be properly diversified with your investments, it is even more important to be diversified with your income," Sutherland writes. "This is because the largest financial risk for most of you is the loss of your primary source of income, which is typically in the form of a day job."
Setting up and managing a rental property can open up a stream of steady income that doesn't require the time commitment of a full-time job.
"If you continue to expand your income streams, you eventually reach a point where you no longer need to rely on a day job (and someone else being in charge of your well-being). This is the point of financial freedom; the ultimate form of financial security!" Sutherland writes.