Benefits of Investing in Real Estate

I bet most of us want to have a comfortable life and retirement. Therefore, a lot of people work hard as they can to achieve their financial goals. While this may be true, we cannot neglect the fact that this goal isn’t easy. Especially if you’re just an average earner. Consequently, we need to be smart in investing and spending our hard-earned money. There are lots of options to invest your money in. Bonds, stocks, mutual funds, and real estate are just a few. But what makes real estate a great investment option? What are the benefits of investing in real estate?

“90% of all Millionaires become so through owning Real Estate.” – Andrew Carnegie

Andrew is one of the most successful businessmen ever. At its peak, his fortune was worth over $300 billion.

What is Real Estate Investment?

In real estate investing, the purpose of the properties is to generate income. It has three basic categories; residential, commercial, and industrial. Out of three, residential is the most common. Generally, real estate is a great investment option. It can generate passive income, less risky, and can be a good-term investment as its value always increases over time. You can even start with just one rental property and have a regular source of rental income.

Like any other investment, real estate can be challenging. It’s like a tree; it’ll only grow abundantly if you’ll take care of it seriously. It won’t just grow on its own. You need to check vital factors like the soil, weather, and location. The same goes for real estate. Before jumping into buying your first rental property, be sure to perform a real estate market analysis, also known as Comparative Market Analysis (CMA). Typically, real estate agents conduct CMA to analyze the similar properties sold in the area. CMA determines a home’s value. It makes sure the homes are not under or overpriced. Investors may also use an investment calculator to calculate the potential return rate of an investment based on different variables like principal, length, etc.

When is the Best Time to Invest?

The sooner the better. You’ll be better off in the long run if you start early. In real estate, there’s no such thing as “perfect time”. If you keep waiting for momentum, you’re just wasting the time that your money could be growing. These years are a good time as it may provide you high returns. The current market and housing conditions are high that you can be assured your money will grow. You just need to invest in the right place and calculate the risk before investing. The equation is simple: the growth of the economy allows the housing market to flourish. It will then create abundant real estate opportunities across the country.

To guarantee a great financial return on your investment, smart and calculated decisions are a must. It’ll grow and diversify your investment portfolio. There’s no magic formula in real estate. Your success depends on how you carefully plan your future investment before making any deals. Besides, you also need to understand the basics and key points of real estate, including its benefits.

7 Key Benefits of Investing in Real Estate

Here are seven key benefits of investing in real estate:

• Stable Source of Income – If you want a long-term return, it is best to invest in rental properties. The monthly rental income creates a steady cash flow that could be enough to cover your expenses and provide you savings. It’s important to find a perfect location where the demand is high like in urban cities and universities. These areas are where most people need temporary housing while studying or working. Other factors such as accessibility, convenience, and safety also fall under finding the perfect location.
• Long Term Financial Security – Real estate attracts investors the most because of the long-term financial security that it offers. The value of the land and property typically goes up over time. Thus, giving investors a sense of security. At any time the economy grows, the housing market grows too. To secure success, it is still best to conduct thorough research before completing any deal.
• Tax Benefits – One of the top reasons why people love to invest in real estate is the numerous tax benefits it has. Investors enjoy tax deductions like property taxes, insurance, mortgage interest, maintenance repairs, operating and travel expenses, legal fees, and property depreciation.
• Advantages of 1031 Exchange – Section 1031 of the United States Internal Revenue Code (26 U.S.C. § 1031) gives investors an advantage to sell his current investment property and buy replacement property with equal or greater value while deferring capital gains. The tax deferment from this process is a great opportunity for investors.
• Inflation Doesn’t Affect Investment – Real estate is a low-risk investment. Economic factors like inflation don’t harm your investment. Unlike with stocks and bonds; interest rates, inflation, and other factors affect their price. Compared with stocks and bonds, the risk of loss in real estate is minimal.

Other Significant Benefits

• Mortgage Payments are Covered – When you have rental properties, they must always be occupied. Where are you going to get money for the mortgage and other expenses? On the monthly rental income of course. In other words, the tenants are indirectly paying your mortgage. You would want to keep them happy for a continuous income stream.
• You’re the Decision-Maker – The best benefit of investing in real estate is having complete control over your investment. You are the boss! You have the freedom to make decisions and strategies that you think are the best for your business. You’ll be the one to decide the monthly rental charge, the property manager, maintenance, tenants and which property to invest in. The power is completely yours!

Get Ready to Invest!

As the world’s population continues to grow the demand for housing will always rise. If you will carefully analyze how the numbers work, your chances of succeeding in this industry will be high. You need to educate yourself about the ins and outs of real estate investing. There are seminars, mentorship programs, and podcasts you can check to get started. It’ll also be helpful if you have an expert by your side that’ll guide you throughout the process.

DISCLAIMER:

THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK AND THEIR PURCHASE SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN AFFORD TO SUSTAIN A TOTAL LOSS OF THEIR INVESTMENT. THERE IS NO GUARANTEE THAT INVESTMENT OBJECTIVES WILL BE ACHIEVED. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THE COMPANY PLANNED OPERATIONS HAVE BEEN UNDERTAKEN COMMERCIALLY ONLY BY COMPETITORS ON A LIMITED BASIS AND THERE CAN BE NO ASSURANCE THAT THE BUSINESS PLAN OF THE COMPANY WILL BE COMMERCIALLY VIABLE. IN ADDITION, ACTUAL RESULTS OF OPERATIONS MAY REQUIRE SIGNIFICANT MODIFICATIONS OF ALL OR PART OF SUCH PLAN.

Our intended investments in commercial real estate will be subject to risks relating to the volatility in the value of the underlying real estate, default on underlying income streams, fluctuations in interest rates, and other risks associated with debt, and real estate investments generally. This investment is only suitable for sophisticated investors with a high-risk investment profile. PROSPECTIVE PURCHASERS SHOULD CAREFULLY CONSIDER, AMONG OTHER FACTORS, the section entitled “Risk Factors” contained in the Confidential Private Placement Memorandum of the Company, as may be amended or supplemented from time to time.

DUE TO THE FINANCIAL SOPHISTICATION OF THE PERSONS TO WHOM THIS OFFERING CIRCULAR IS DIRECTED, THIS OFFERING CIRCULAR SETS FORTH LIMITED INFORMATION MATERIAL TO EVALUATING THE MERITS OF AN INVESTMENT. PROSPECTIVE INVESTORS ARE STRONGLY URGED TO CONSULT WITH THEIR OWN ADVISORS PRIOR TO DECIDING WHETHER TO INVEST.

Neither Alpesh Parmar nor Wealth Matters associated claim to be an expert in tax, legal or insurance strategies. Please consult an expert or advisor.