Real Estate Investment: Top 3 Perks
Imagine this scenario: the bills are paid, the groceries are safely tucked away in the fridge, the car is in good order, and you find yourself with a tidy sum that you’d like to save for a rainy day. But rather than place that money in a typical 401k contribution or deposit in a savings account, why not put your money into something real? Enter real estate investment, a surprisingly-profitable method of securing your funds for the future that’s both efficient and fun! Whether you’re a long-time investor or just getting started, let the experts at RE/MAX Plus use our decades of experience to show you why real estate investment is right for you!
- Cash flow
Perhaps THE biggest perk to real estate investment is the steady stream of income that comes from renting out your property. Savvy real estate owners reap a monthly profit even after any maintenance and mortgage fees are paid. The income itself is often much more stable and predictable than playing with personal portfolios and the constant rise-and-fall of the stock market. With the profit received from real estate, many property owners reinvest into making improvements and repairs to their own home or use that income to further their private investments elsewhere. Bottom line: it’s your money, you decide!
- Tangible Assets
Whether short or long-term investment is your goal, owning real estate gets its best value from being a tangible asset. This means that unlike stocks, CD’s, and other investment opportunities, your actions as the owner can have a direct influence on just how much your property is worth. Putting a new roof on a home or upgrading a kitchen/bathroom can add thousands of dollars to the property value. Re-tenanting a building or adding a secondary service such as in-house laundry hookups can justify an increase in rental charges and improve income performance. Compared to other investments, you have a greater degree of control over performance and value than any other type of investment.
- Taxes, Inflation Hedges, and Equity
Besides the income and control gained as a real estate investor, the perks of tax breaks, inflation hedging, and general equity are extremely valuable. The cash flow you receive from rental charges is not subject to a self-employment tax, mortgage interest, or property taxes; investment properties are all considered write-offs. Plus, with a fixed-rate mortgage, monthly payments remain the same even as inflation increases, protecting your investment’s value. Finally, as the mortgage is paid off, equity is created, which can be used as collateral to fund your retirement, buy another property or even pay for college tuition! The benefits are endless!