If you?re looking for an additional way to make money, then real estate investing can be a lucrative option. While many other types of investments such as stocks, bonds, and mutual funds can offer a solid return on your investment, real estate remains one of the best bangs for your buck. Here are six reasons why real estate investing can be an excellent option for building your wealth.
Stable asset
Although the real estate market can and does fluctuate, property values tend to trend upward over time. According to the National Association of Realtors, real estate has appreciated six percent each year since 1968. Although housing prices plunged during the Great Recession, studies show that they are once again on the rise.
Steady income
If you buy real estate to use as a rental property, then you can count on collecting a steady income from your tenants. The key is the find high-quality tenants and to charge enough in monthly rent to cover your expenses with some money left over. When calculating rent, be sure to include your costs for mortgage payments, insurance, fees, utility bills and taxes.
Tax benefits
Real estate investors have long known that one of the key benefits to this type of investing are the tax advantages. Although the details of those benefits have changed since the Tax Cuts and Jobs Act, you can still reap the rewards. Talk to a tax professional to determine exactly what tax benefits you may qualify for before making your investment.
Various financing options
You don?t need to have cash upfront in order to become a real estate investor (though it certainly doesn?t hurt). There are many ways to finance the purchase of real estate including a traditional mortgage or a private loan. As your portfolio of investment properties grows, you?ll find more and more financing options becoming available to you.
Work on your own
If a traditional corporate, 9-to-5 job isn?t for you, then becoming a real estate investor can be a great fit. One of the pleasures of investing in real estate is being your own boss. You get to decide how you want to invest and you?re responsible for your own growth. But it doesn?t have to be a solitary endeavor if you don?t want it to be. Many real estate investors partner with other investors, which can be a great way for all parties to build their wealth.
Unlimited growth potential
Finally, when you?re getting started in real estate investing, there?s really nowhere to go but up! Start with one property and build on your success. Over time you can be managing a large portfolio of properties spread over different areas. The sky really is the limit!
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