Contrary to belief, real estate investment is not just a revenue stream set aside for the wealthy. With the right research and proper preparation, anyone can dip their toes into the real estate market. All you need is a small down payment, a passion for hard work, and the desire to build a portfolio.
With the right direction and the appropriate capital, both beginning and expert real estate investors can enjoy consistent cash flow, incredible returns, tax advantages, and more. If you are thinking about becoming a real estate investor, check out these ten reasons to start today.
Real Estate is a Tangible Asset
There is always a great risk when investing money into intangible assets like stocks because you don’t physically own anything. At any moment, the stock market can crash, and you could lose your entire investment. Real estate, on the other hand, is tangible. Although the market can fluctuate, your investment in real estate will always be worth something.
You Can Maximize the Value
No matter how much you paid for the property, there is always an opportunity to improve and increase its value. Everything from interior renovations to adding amenities like a deck or a pool can tremendously increase the price tag of your investment. Michele Tecchia says that in real estate, the investor has the power, and it’s up to you to determine how much work you want to put into a property.
Real Estate Naturally Appreciates
Not only does your house appreciate, but the land it’s built on also grows in value over time. Even if you don’t improve your property through renovations and added amenities, your investment can still naturally appreciate over time. As long as the property is maintained correctly, your investment can exceed its original value.
Build and Leverage Equity
Your equity is the difference between the value of your property and what is left on your mortgage. Therefore the longer you own your house and make timely payments, the more your equity builds up. You then can use a portion of your equity to finance more investment and build your portfolio.
Predict Your Cash Flow
Unlike other investment real estate allows you to predict your cash flow before you even purchase the property. With the right research, you can accurately predict how much you could charge in rent and then decide if it would be worth your investment.
Passive Income
One of the best things about investing in real estate is the opportunity to generate a consistent cash flow and earn a passive income. As long as your property is maintained and habitable, you can rent out your house to cover mortgage payments and even turn a profit.
Tax Deductions
Another enticing benefit of investing in real estate is the potential for tax deductions. As a homeowner, you are not eligible for many tax deductions regarding your property. However, when you rent out a property, the IRS views your investment as a business and allows you to itemize deductions based on what you need to maintain your property.
Diversify Your Portfolio
You never want to put all your eggs in one basket. Investing all of your money into one investment can be risky and detrimental. Investing in real estate gives you the opportunity to diversify your portfolio by keeping your money safe and secure in a tangible asset, especially if you choose a property in a highly trafficked area while house hunting.
Protects Against Inflation
When inflation increases, the cost of living, including property values and renter rates, go up. Therefore, owning investment rental properties can protect you financially by providing an increased monthly income.
Establish A Retirement Plan
Investing in real estate is a great way to invest in the long term. On top of collecting monthly payments from rental properties, you can sell an investment for capital gain. Consider holding on to properties until you are close to retirement. Then you can use the profit to get you through retirement without the worries of dealing with tenants.
Start Investing Today
It is always a great time to start investing in real estate. As long as you do your research and have enough money for a down payment, you can benefit from everything real estate investment has to offer.
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