If you are considering the idea of real estate investing, you’re in the right place. This guide will provide you with 10 reasons why it’s a great idea. You’d be hard-pressed to find something like this anywhere else.
If you are looking for a realtor that will help you out, Teifke Real Estate might be exactly the one you want to work with. You can find out more information by visiting Teifke Real Estate. Let’s dive right in and talk more about the ten reasons why real estate investing should be on your radar if you want financial success.
When it comes to your financial security, real estate might just be what you want for the long-term. This means you can hang onto the property for a lengthy period of time. You earn monthly income and your property value may rise over time. When it comes time to sell, you might sell it at a higher price point than when you bought it.
A great cash flow opportunity
If you are looking to make increases in your monthly income, then you’ll want to invest in real estate properties that will make sense to collect the amount of money you want. Whether it’s residential or commercial, you can rent it out at a price that can be based on the property values in the neighborhood or part of town. When finding a tenant, you’ll want to take a deeper look at their payment history. You don’t want delinquent payments. You want a tenant that pays on time every time.
When your property values rise, you will stand to get a better ROI. The appreciation of property values won’t be a guarantee. Because of this, it may be important to do your due diligence prior to purchasing a property. You’ll want to find out if it does have the potential to increase in value over time. It’s important that you do an analysis of the neighborhood your target property is in. Because it can make the difference between a poor ROI and a great one.
An opportunity for diversification
Real estate may be one of your first types of investments. This will also help you open the door to diversifying your portfolio. You can also invest in stocks, mutual funds, and more. This will not only give you some protection in the event of an economic downturn, but it will keep your finances afloat. If you put your eggs in one basket, you’ll lose everything. So if you invest in real estate, consider other investments to go along with it. If you invest in stocks and have plenty of cash on hand, what are you doing? Invest in a property or two and you’ll be able to diversify and grow from there.
You get tax advantages
If you invest in real estate, you’ll get plenty of tax benefits out of the deal. This includes giving you so many deductions due to expenses going towards your property. This includes but is not limited to maintenance, management fees, mortgage interest, property taxes, and more. However, if you sell the property, you may be hit with capital gains taxes. That’s because it won’t be taxed as income if you sell the property for more than the price you bought it at. The good news is that the capital gains tax will be lower compared to the income tax you may have paid for. So that may be a win-win either way.
Protects you against inflation
Inflation can happen at any time. Even now, this has become one of the hot topics. Even with the prices rising for services and goods, your property value may rise too. The rent may even increase and thus you may notice a rise in income due to rent and the appreciation of your property. While inflation may hinder most people, those with investment properties will be protected from the effects of it.
Allows you to leverage your funds you earn
This can be great for when you want to purchase more investment properties. You’ll be using someone else’s money to get it done. By someone else, we mean the banks. Since you have rental property giving you the financial advantage, you’ll be able to use it as leverage to apply for loans. You’ll be quickly approved and they will trust in you to pay it off quickly and on time (since you may already have the funds). So you’ll grow your portfolio and repeat the process if you want to.
A passive income opportunity
If you are already earning money, one of the best ways to earn passive income will be through rent. You’ll get the checks coming in every month and they’ll go straight to the bank. Pretty cool, right? The more properties you own, the more passive income you’ll have. It’s as simple and straightforward as it can get.
You can build capital with real estate investing
You can build capital with the use of your rental properties. Whether you earn it via rental income or selling the property outright, you’ll be able to see it solidify over time. The thing is, you’ll want to invest in the properties that have the potential to increase in value over time. If your goal is building capital, then real estate investing will help get you there.
You’re in control
Imagine getting paid what you want. Or even working for yourself. That’s right, you’re the boss and you decide when to work (and when not to). With investment properties, you’re in control. At the same time, you have control over the property as well. Yes, you may need a property manager to handle some of the day to day operations. But at the end of the day, you have the authority and the final say over what happens with the properties. You may also need to enforce policies such as when a tenant violates a lease agreement.