WHY SHOULD YOU CONSIDER INVESTING IN REAL ESTATE?

Written by Joe Williamson, Realtor

President Franklin D Roosevelt once said, “Real estate cannot be lost o stolen, nor can it be carried away Purchased with common sense, paid in full, and managed with reasonable care, it is about the safest investme the world ” The fact is, real estate has been a great avenue to build pers because of its predictable cash flow, tax advantages, and great returns or yourself and your family

It’s important to know that owning property is a tangible asset that will always have value derived from both the land and any structures attached to the ground Unlike the risky stock market which can bottom out at any time, the raw land you own will always have value

A key benefit of real estate investing is its ability to generate cash flow This is your net income from a real estate investment after you have paid operating expenses and mortgage payments This will often strengthen over time as you continue to pay down your mortgage while simultaneously building up equity in the property

Real estate can also take advantage of the many tax breaks and deductions that can help reduce annual tax burdens Deducting the reasonable costs of managing, operating, and owning a property is a significant benefit to real estate investment With bonus depreciation, real estate investors can deduct 100 percent of the purchase price of any qualified property during the year the purchase was made

Another great tax benefit is the 1031 Exchange which can allow an investor the opportunity to postpone paying taxes, saving them thousands of dollars In general, if an investor sells their rental property, they will likely owe a considerable amount in capital gains tax due to the profit earned The 1031 Exchange allows the investor the ability to purchase another like-kind piece of real estate without paying those pricy capital gains taxes on the sold property It’s also one of the best ways to get rid of underperforming rental properties in your investment portfolio

Purchasing a home to live in can certainly be considered an investment tool as well Billionaire John Paulson remarked, “I still think buying a home is the best investment any individual can make ” Are you currently renting a home? Consider how much money could be invested each year by paying a mortgage rather than paying a landlord Monthly rent of $1,000 equates to $12,000 annually Over 30 years, you have just paid nearly $400,000 – with no equity and no property to show for it Another benefit is that if you ever decide to sell your property,

You Will Likely Earn A Profit By Selling It For A Price Greater Than What You Initially Paid

While inflation will continue to fluctuate and stock prices may fall, owning real estate will always have value Remember these key takeaways to get started on your real estate investment journey: Buy low and sell high, diversify your financial portfolio to include rental properties, and find a knowledgeable realtor to take the first step toward buying your first home – you won’t regret it!