The Advantages of Real Estate Investments
Different investment opportunities are always available anyone that has the right financial banking. Investing in stocks and bonds could be one if you know the stock market well. Finding the ideal broker to make your placements could be a real challenge though. Going into retail business could be another option, but you really have to know the “ins” and “outs” of the industry you are going to. These could be a big gamble on your side. Historically, the real estate industry has outperformed the stock market in terms of growth. This could be another window of opportunity worth looking at. It is simple to understand because you just have to buy when the market is down and prices are low. You can hold on to your property or you can let go of it when the right opportunity comes or when prices are already high.
Long Term Increase In Value: The real estate business can give you unique benefits like price appreciation. In the short term, the market may go up or down, but over the long term, you will have a safe investment because holding on to your property will almost guarantee an increase in value. Having a large portfolio of properties is a key secret to building massive weatlth.
Leverage Your Money: A good benefit you can get if you go into real estate is its ability to be used an asset to borrow money against. You can go to a lender or bank to borrow funds to purchase a house or property of your choice. The cash you have may to go as down payment and mortgage the property with the bank or lender paying the full acquisition price. If the interest you pay on the mortgage is much lower than the return you make from the rental property, then you are profiting month after month by using someone else's (the bank's) money and only a little of your own.
Tax Advantages: Tax benefits can also be enjoyed when you purchase real estate and making it your permanent home. If you acquire it through a loan, the interest you pay on your mortgage can be tax deductable. The property taxes you pay for your house can also be an income tax deduction. Depreciation cost of your property will also give you added benefit because theoretically its value lowers because of age and you can reflect it in your tax return.
Ongoing Rent Income: In a “down” real estate market, the opportunities for a prospective investor are plenty. Spotting a condo you can rent out while living in your current home will give you added income. A low priced house located in a nice neighborhood will also be a good rental prospect. Rental properties provide good income opportunities and give you equity on the property itself at the same time. Remember, on top of getting rental income, you are still getting appreciation from the property over time.
Having full knowledge of the benefits of real estate acquisitions, we can now look at bigger opportunities like the foreclosure market.