Investing in real estate has been popular since the 20th century. It is considered one of the safest and most stable investment because it is tied to a physical asset. In most cases, not all, the property would at least maintain its value or better yet, it would increase over the year which would bring profit to the investor. It is very important that the monthly mortgage payment is paid, and the necessary insurance is available, because only then can the investment not be a total loss. Even when the market crashes, there will be some money made from the investment. From the short introduction, it is obvious that there is more advantage than disadvantage in investing in a real estate. This article would offer four advantages of investing in a real estate.
1 – Build equity and appreciation
Investing in a real estate can produce good cash flow per month for the investor and it can also build equity over time. If an investor acquires a tenant, they can use the tenant’s rent to pay the monthly mortgage payment. When an investor pays the mortgage payment with the proceeds from the tenant’s rent, they are basically having someone else pay their investment. Additionally, investors can also build appreciation over time. Appreciation in this context is the increase of the real estate’s value over the years. When someone invest in a real estate for long-term, the property’s value would increase, where a property that cost 150,000 dollars will increase up to 230,000 dollars in 10 years.
2 – Easy entrance
An investor that is interested in investing on real estate does not need millions of dollars in their pocket to start investing. There are many financial options that can help with their first investments and investors should take advantage of this. Examples of financial options available are non-recourse loans, personal loans or hard money. To invest in the first property, investors only need to put 20% down and they can ask for a low-interest mortgage which would be a huge help in paying off the mortgage. It is crucial that investors understand the available financing options to optimize your investment.
3 – Tax deductions
It is common knowledge that real estate investors enjoy tax deductions that other investors don’t have the access to. Some of the deductions a real estate investor can claim are, interest paid on mortgage, property taxes, insurance and repairs and maintenance. Through these deductions, it can mean progressive cash flow for the investor. Lesser money would be sent to the IRS as well which can benefit the investors in many ways.
4 – Flexible time commitment
Some investors make investing their full-time job, while some simply uses it as a side income. It truly depends on the investor’s style; their time commitment can differ from one another. For example, a celebrity does property investment as a side job where they can get extra income and while investing, they can also focus on their career where that is their main income. Many believe investing in real estate should be a full-time job because of the amount of dedication and focus you would need when you invest in a property. However, it is not impossible to do this as a side job and be successful.
Investing in real estate can be a new territory for some but it would definitely be worth your time and effort because it has a higher success rate than other investments. If you already investing in a property and is currently looking for a tenant, you can advertise your property at Edgeprop and when people search for some keywords, such as property in kota kinabalu then they can find your property. check out this link to find out more about sport science.