TOP 10 benefits of investing in real estate: start today!
You can diversify your portfolio by investing in real estate. It is full of benefits. Stealth Capitalist selected 10 benefits for you to know better. Please keep reading to check them out!
by Julia Bermudez
Learn all the benefits of investing in real estate with our easy tips
Do you know the benefits of investing in real estate? It can be an excellent investment with an extensive list of benefits.
It’s always good to have a diverse portfolio of investments, and real estate will be a strong card to have on your hand. Like every investment, you have to study a lot about it and carefully assess your options.
Some benefits of this investment are a stable cash flow and achieving a passive income. Want to know more about these and other advantages? Keep reading this article and learn more about this high-potential investment.
Is real estate a good and safe investment?
A good option for having a more diverse portfólio is adding real estate investments. Every investment involves risks, so we can say that it is safe to invest in real estate if you pay attention to its conditions.
Always study your potential investment before closing a deal because many factors will impact your gains. Before buying a rental property or any real estate, you should consult a real estate professional. The location and conditions of the property are some major factors to analyze.
You need a clear vision of the waves on the economy to drop at the right time and place. If you have the right conditions in your favor, you can make a good and stable income out of real state investments.
10 great benefits for you to start investing in real estate right now!
There are many benefits of investing in real estate. Here, we present to you 10 of these benefits.
Financial security in a long term
One excellent benefit is the potential for long-term financial security. Rental properties tend to appreciate over time. Although this is not a rule, you can more or less predict it by studying the location. But once you buy the property, it will be yours to keep renting or sell it and get your money back.
Don’t get hit by inflation: grow within it
Inflation tends to be a little bug, eating profits from the inside out. But that is not the case with real state investments. If the inflation goes up, rental and property value go up too.
Just remember that nobody wants that inflation rises at the point of breaking people’s economies and generating a snowball of economic crises.
Not ready to buy a property? Try investment trusts!
To invest in rental properties involves compromising a lot of money. Also, it makes you lose some liquidity and may seem like a big move. A good alternative is to buy real state investment trusts on stock exchanges. It is pretty profitable and offers higher dividends than many other stocks. It is easier to buy and sell than a rental property, and you can start with a lower investment.
Good appreciation rates
Owning a property is still a solid investment. It is improbable that real estate will depreciate, except in specific situations. Rentals have annual adjustments that keep a high cash flow. You can make a profit selling your property after some years if you pay attention to the interest fees on your investment.
Unlike stocks and bonds, real estates are material things. So it will always hold value, and it’s unlikely to depreciate. A house or a land value will never go down to zero, even less negative. And even if it depreciates, the rental opportunity can keep a cash flow. Or, in the worst-case scenario, even if it drastically depreciates, you’ll at least have a house to live in, which is pretty nice.
Passive income: a dream come true
To earn money without compromising your time. This is everybody’s wish when it comes to income. You will generate a monthly cash flow by putting your property to rent. Of course, you have to think about the mortgage payments and operating expenses. Then rental needs to cover these costs to generate an income.
Use a leverage strategy
You can increase the potential return of your real estate by combining multiple financial instruments or borrowed money. That’s called leverage. In other words, you can borrow money from a lender to buy a house. Then, with the rental, you can pay your loan with other people’s money. Once you pay the loan, you’ll have the place for yourself and will start making a profit. This strategy can accelerate the process, as you won’t need to accumulate the property’s total price to buy it. The lender will analyze your credit score and the potential return of the real estate to grant you the loan.
As a real estate investor, you’ll have many advantages regarding tax payment. You get a tax exemption by owning a rental property, and the government also offers tax breaks. These breaks include insurance, legal fees, property taxes, maintenance repairs, and so on. Also, there is no employment tax upon rental income.
Have money on your hand? Try house flipping
Nobody is turning houses upside down here. House flipping consists in buying a property for a lower price, making improvements, and selling right away for a higher price. To succeed in house flipping, you need to find the right house and negotiate until you get the lowest possible price. Also, you need to evaluate if the cost to repair the place will compensate the price you’ll be able to sell it.
Diversify your portfolio
It is good for your financial strategy to have portfolio diversification. That way, you won’t be a hostage of a particular stock and will protect yourself in times of economic instability. If one of your stocks goes down, another investment can go up, keeping a balance and protecting you from crashing. Real estate is a really stable investment because they are physical and tend to appreciate over time.
A real estate investment is full of benefits. One of the most desired is passive income. Do you know that there are 3 types of income? You can learn everything about each one of them here at the Stealth Capitalist. Just keep reading the following content and learn something new.
About the author / Julia Bermudez
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