When it comes to investing, you have many options. Most people stick with the stock market because it’s fairly simple to get into with the right help, especially if your employer provides you with a 401K plan. However, if you really want to be an effective investor, you have to consider other opportunities as well.
Although it can be a bit messier than stocks, real estate makes a good choice if you’re looking for a new way to invest your money. Here are four reasons why.
It Offers Some Great Tax Benefits
No one likes tax time. It’s a game we all play, but we don’t necessarily play it well because we don’t always choose investments that will enable Uncle Sam to take it easy on us when April rolls around. Real estate is different.
There is a mind-blowing array of tax benefits that come with real estate that include tax deductions on:
- Mortgage interest
- Cash flow from investment properties
- Operating costs
- Property taxes
- Insurance
- Depreciation
- And more
To make sure you’re taking advantage of every deduction possible, it pays to speak with a professional advisor when tax time rolls around. They can help you identify ways to save throughout the year and at tax time that will help you maximize your investment.
It’s a Tangible Asset
Many investments are intangible. That can be a difficult concept to understand. They include things like trademarks, patents, and ownership in a company. Intangible assets are, especially in the stock market, extremely volatile.
Tangible assets are different, and that’s exactly what real estate is. It’s an actual building you own. Just having a visual representation of the investment is enough to make some investors feel more comfortable.
It also means you have more control over the investment. Do a little remodeling and you can increase its value.
It Is Guaranteed to Increase in Value
Speaking of increasing in value, a piece of real estate will always appreciate in value. However, it is important to understand that you’re playing the long game with real estate.
It’s true that a housing market crash can drastically reduce the value of your property overnight, but over time, it always ends up being worth more. When you invest in real estate, it can pay off greatly in the long run, as long as you’re willing to hang onto your property for years or even decades.
It Can Provide You With Passive Income
There are many ways to earn passive income, but real estate is one of the most inviting to investors. It is especially alluring to people in retirement because it provides them with another income stream.
However, it can be great for nearly everyone. From families to people who want to spend the majority of their time traveling, real estate can provide everyone with passive income when the property is maintained properly.
It’s true that real estate investing isn’t for everyone, but it is definitely an option that everyone should consider. With so many benefits, you might catch the real estate investing bug and want to invest in multiple properties!