The benefits of investing in properties are numerous; choosing the right asset is key to receiving stable cash flow, real estate appreciates over time, and as months go by your equity builds. Real Estate is a safer investment as the market is not too volatile. Here are some benefits of building a Real Estate Property Portfolio;
Appreciation – Make money through rental income. Rent and property value may increase every year.
Tax Benefits – rental income is not subject to self-employment tax, the government offers tax benefits to real estate investors. These include depreciation and significantly lower tax rates on long-term profits.
Steady cash Flow – monthly income called “cash flow.” This is the extra money that is left after all the bills have been paid.
Leverage to borrow Capital – Leverage is the use of borrowed capital to purchase and/or increase the potential return on investment. Leverage, when used wisely to minimize risk, is a powerful advantage of real estate investing. Using a conventional loan, you can buy an investment property with a 20% down payment.
Builds Equity – When you use leverage wisely, your tenants are essentially buying the property for you. Rental income pays down your loan each month and builds equity for you.
Inflation Hedge – Inflation is the economic reality that prices increase over time due to the value of money decreasing. Real estate investments keep pace with inflation historically, and it’s an excellent inflation hedge in many cases. As the price of a loaf of bread goes up, so do rents and property values. The one thing that doesn’t increase is the monthly cost of a fixed-rate mortgage payment.
