Real Estate – A Solid Investment
Real estate has long been considered a solid investment for many reasons. It is a relatively safe and easy way for people to build wealth beginning with a small amount of money. If you are interested in investing in real estate, I’d be happy to help you find the right properties.
Here are some of the ways investing in property can help you build an investment portfolio.
1. Reliable Steady Cash Flow
Your property portfolio can provide you with a reliable and steady cash flow. Investing in rental properties is relatively easy as expenses are predictable and if your properties remain occupied you know what to expect in terms of profit margin.
2. Real estate appreciates
Time in the market sees your real estate appreciate in value. Real estate consistently appreciates, even during economic downturns, making it one of the more reliable investments. On average, real estate in the US appreciates between 3-5% annually.
3. Help You retire
Your property investments help you retire. If you have been paying on your mortgage throughout your working years, you will experience greater cash flow as you near the end of your mortgage term and the principal is paid off.
4. Reduced tax liability
Real estate sales are taxed at a lower rate than other income. When you sell your property, you are taxed short- or long-term capital gains which are usually lower than income tax brackets.
5. The value of leverage
Your portfolio equity can be leveraged. One of the most attractive reasons for investing in real estate is the ability to leverage your money. When you take out a mortgage to purchase property you reduce the amount of capital required. As you build up equity in the property, you borrow against the equity or refinance the original loan, freeing up cash to buy another property.
6. you control the asset
You have control to improve upon your asset. Unlike an investment in stock, where you have no control over how it performs, you can improve upon your real estate investment. Updating or upgrading systems, finishes, appliances, and landscaping helps build value in your investment.
7. deferred taxation
Defer capital gains taxes under the 1031 exchange tax cod. You can invest the gains from the sale in one property to the purchase of another property without paying taxes on the gains.
8. depreciable assets
Claim a depreciation expense on an investment property, even though the value of your investment property is actually appreciating. The depreciation deduction allows investors to generate a higher cash flow while reporting a lower income for tax purposes.
