August 14, 2020
5 Reasons Why Real Estate is a Great Investment
“Buy land, they’re not making any more of it.” – Mark Twain
Many see the truth in that statement and invest accordingly. In fact, Americans rate real estate as the best investment for seven consecutive years according to a Gallup poll. They value it over the stock market, saving accounts, and even gold. Even with shifts in the economy, the belief in real estate investing has not waivered. Investors point to factors such as predictable cash flow, appreciation, improvement opportunities, and tax benefits as a few of the reasons.
Offers Predictable Cash Flow
Cash flow is net spendable income that comes from the investment after all operating expenses and payments are made. A 6% or higher cash flow should be typical of an excellent real estate investment. There will always be value in your real estate investment, both the land and the home. Always be sure to get the best homeowners policy available to you to ensure that your investment is protected.
Appreciates in Value
The longer that you hold on to real estate, the more money you will make. Even during the uncertain times that have come in the housing market, prices eventually return to normal, and appreciation gets back to where it once was. History has proven this to be accurate as the economy has taken its turns.
Real estate is unlike other investments, like stocks, because it is tangible. Because of this, you can always improve its value! Updating, renovating, and redoing paired with a little hard work and motivation allows you the ability to make your real estate worth more. Cosmetic changes or structural changes are ways to ensure that your property is growing and improving with the times and is always worth the money!
Coincides with Retirement
Retirement is one of the most important phases of life to consider when investing your money. Which option will carry you through the best? Considering how much you will need to live off of each year after retirement is vital to deciding how you will best serve you by the current ways you invest your money. When you invest in real estate, the cash flow is lower, and the principal reduction on the mortgage is less. However, as time goes on, the mortgage gets paid down, and the cash flow then begins to increase. As time goes on, as you near retirement, you are saving more – which is the perfect long term investment.
Comes with Numerous Tax Benefits
There are many opportunities for tax deductions on real estate investment properties from mortgage interest, operating costs and expenses, property taxes, insurance, and improvements, to name a few.
Real estate is a smart investment for many reasons, as you can see. Not only is it a smart financial decision, but it will also provide you with a place to make years of princess memories that will reach far beyond the benefit of the investment itself. It’s the only investment that you can live in. The benefits of investing in real estate aren’t ones to overlook.
If you need help with your investment financing, give us a call today.