If you have an entrepreneurial spirit, real estate investment might be the career path you’re looking for. Many business owners love investing in real estate because it offers a great return on their money and other benefits like tax incentives and passive income generation that your typical job won’t provide.
Real estate can be a great investment, whether you’re looking to add to your holdings or help your children get ahead in life financially. It’s also one of the few investments that can provide you with both income and tax benefits through depreciation, which allows you to deduct part of the cost of owning and maintaining your home from your taxes each year. Here are the top seven reasons you should invest in real estate now.
The real estate market has seen better days in recent years, but now may be the best time to invest in real estate. Ready to take the plunge? Here are seven reasons why you should invest in real estate right now!
More Affordable Than You Think
Owning a home may be more affordable than you think. Unlike renting, homeownership allows you to build equity over time, which is simply your investment growing through tax-deductible mortgage payments. Plus, when it comes time to sell your home, if you’ve taken good care of it, you’ll likely get most of your initial investment back when you go to sell.
A Sense of Long-Term Security
One of the best things about investing in real estate is that it’s an investment you can bank on. Your home’s value only rises as long as your neighborhood remains desirable. That means if you sell, you’ll almost certainly be able to buy a new home for less than what you originally paid (or at least close to it). And if you don’t move? Well, your home still has some inherent worth.
Property Taxes Are Deductible
When making an investment decision, remember that you can deduct real estate taxes from your income tax. If your state has high property taxes and you have a home office, then chances are you could be saving a bundle. Just be sure to keep good records of how much you pay so that when it comes time to file your taxes, you’ll have everything ready to go!
Opportunity to Maximize Value
One of the great things about real estate is that, over time, it can provide you with substantial capital gains. That’s one reason real estate investments have historically had such a low correlation to other asset classes. So your portfolio doesn’t suffer during downturns when other types of investments are faltering. For example, you can transform your real estate into rentals for a stream of cash flow. And because most people need housing, rent prices tend to be more stable than stocks. If you wish to do this but have no time, there’s always a rental property management option where you hire a professional to handle everything—from lease signing and maintenance to tenant screening and collecting rent checks on your behalf. This way, you’re free to allocate funds toward growth elsewhere while enjoying passive income from your investment properties on an ongoing basis.
Protection Against Inflation
Over time, purchasing power erodes. The value of your dollar is reduced by inflation, forcing you to spend more and save less to maintain your standard of living. However, by investing in real estate, you can protect against inflation and other threats to your purchasing power. By putting money into real estate today, you’ll be able to reap greater financial rewards tomorrow.
High Tangible Asset Value
When it comes to investment vehicles, people usually think about stocks and bonds first. But you can also invest in real estate. Global real estate is worth 217 trillion dollars, according to Forbes. Over 67% of global assets are in real estate. The advantage of a physical property over other investments is that you’re not just investing in abstract money or conceptually valuable property but actual pieces of tangible real estate where you can live or run a business.
Ability to Leverage Funds
One of the biggest advantages of investing in real estate is that you can leverage your money. Instead of putting down all your funds for a piece of property, you may only need to put down a fractional amount. It allows you to own more and build your portfolio more quickly than if you had only been able to invest in cash. It also ensures that you won’t lose too much money if one piece doesn’t work out. Although many investors take risks with their investment properties because they want significant returns, real estate offers opportunities that other investments don’t.
In conclusion, real estate is a great long-term investment. Whether you choose to flip or hold, an investment property can create substantial wealth over time.