Investing in Real Estate is often considered one of the safest investments you can make, financially that is. With some common sense, research, and having the right Realtor in your corner, you can build wealth through real estate. Here are 5 reasons why investing in Real Estate is one of the best investments you can make!
1. Leveraging your Money
Let’s say you buy a rental property worth $200,000 and put 20% down when you buy it ($40,000). Historically, home values appreciate at 2-3% per year. So, each year your property should increase in value by $4,000-$6,000, but because you are leveraging your money that is actually a 10-15% return on your $40,000 down payment.
2. Create a Steady Cash Flow
FACT: you can calculate how much dough you’ll be making on a monthly basis before you purchase an investment property. If you buy right you will get a property at a good price, and then have tenants that pay all of your expenses, while you receive extra cash in your mailbox.
3. It’s a Safe Gate Against Inflation
This one is simple: typically when the prices of goods and services rise, home values and rents do too.
4. There are Tax Advantages
As an investor, there are many expenses that you can deduct from your taxes. Property taxes, mortgage interest, property management fees, the cost of repairs, and many more are all examples of tax deductions. The best part is if you sell your property for more than you paid for it, the gain you receive won’t be taxed as income. Instead, it will be taxed as capital gains, which typically come with lower tax rates.
5. You Have Control
If you’re familiar with investing in stocks and mutual funds, you know that you have no control over the type of return you will receive. With Real Estate, you get to maintain control – you pick the property, you determine when money should be invested into the property, you get to pick the tenants, you pick the rent amount, and you get to choose when, or if, you want to cash in on your investment with no penalties.
None of this is to say that investing in Real Estate is necessarily easy. Just like any kind of investment, it does require knowledge, research, and time. However, investing has great advantages, like the ability to leverage your own money, you can take advantage of tax breaks that apply, and maintain control over your investment!
If you are someone who has been thinking about investing in real estate or you are someone who already invests, but maybe needs a new partner to help identify ideal properties, connect with Furner Realty Group. We are backed by over 10 years of experience in investing, with Ross Furner having personally invested over $10,000,000 of his own money! We have the resources and know-how to help you safely invest in today’s real estate market.
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