Is Buying a Real Estate a Good Investment??

Is Buying a Real Estate a Good Investment??

Is Buying real estate a good investment? Why do we remain hearing about people making money in real estate? More and more people are discovering real estate investment opportunities and the rewards that come with having an investment property.Real estate is a great investment option. It can generate an ongoing income source. It can also rise in value overtime and prove a good investment in the cash value of the home or Place that you buy. You may use it as a part of your overall strategy to begin building wealth. However, you need to be sure that you are ready to begin investing in real estate Property. Unlike other investments, you will need to spend money to maintain and care for your property in order for it to continue to provide a source of income. One thing I always hear from people who are about to buy a house is, “Buying real estate is an investment! One day this house is going to be worth WAY more than it is now.” First, let’s take a look at some of the benefits of buying a House.Here are the 9 myths of real estate you need to know before you even think about buying a house.
Income
With stocks and bonds both yielding about 2%, one of the main benefits of real estate is the ability to generate significant income without having to sell your investment. It’s possible to generate high single to low double returns on your cash even with a mortgage.
Risk
With real estate, you can control risks more so than with stocks. You can look at how residential and commercial property investments are performing and at their past performances to understand trends and patterns. Stocks are more difficult to understand.However, to a certain extent, an investor can understand the influencers of a real estate market more easily.
Buying low
You turn an instant profit if you manage to buy a property for under market value. Think foreclosures, quick sales, and awesome negotiation skills.
Selling high
You can make additional money if you stage the property to attract buyers over market value. With stocks, you always buy and sell at market value. With real estate, you can try to beat the market.
Required Capital
There are ways to make money in real estate without having to actually spend money, such as wholesaling. Trading is another option that comes with real estate because the assets are real. Real estate is also one of the few investments in which you can gain ownership with little or no money down.While investments can be very liquid, real estate brings diversification to an investor’s portfolio. The more diverse a portfolio, the less likely an investor will get burned if one type of investments doesn’t perform well.
Profit from extra cash flow on a refinance
If you are able to refinance the property to lower your mortgage bill payments while the rent stays the same, you are generating more cash flow every month. You can build a cushion for maintenance, save up for a deposit on a rental, or have more passive income to live off.
Leverage
Historically, real estate appreciation plus rental income has underperformed stock appreciation plus dividend income. What gives real estate an advantage is the ability to benefit from the leverage of purchasing it with borrowed money at relatively low interest rates.
It’s a more stable investment
The property market is usually much less volatile than the share market, at least partly due to the effort required in order to purchase a property – in terms of due diligence, legal checks, inspections, length of settlement periods and so on. This means that property is less prone to short-term speculators than paper asset classes. This – along with the relatively long amount of time it takes to liquidate a property asset – also reduces market volatility significantly.
“Properties in well located area’s, underpinned by good supply and demand, rarely crash overnight or even over extended periods of time,” says Cherie Barber. “They hold their own or at least level off and rarely experience major falls. Investors can avoid high risk areas simply by researching suburbs and properties well before they buy.”
Tax advantages
Real estate also comes with a lot of tax advantages. First, you can deduct costs such as the mortgage interest, property taxes, and depreciation from your taxes and even use excess “losses” to reduce your other taxes. If you sell a property, you can delay the capital gains tax by reinvesting the proceeds in another one. When you pass away, your heirs can inherit the property and sell itwithout having to pay any tax on all the appreciation during your lifetime.

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