The Benefits of Real Estate Investing
There are many people who want to get into real estate investing. Although some people do make a hefty profit from it, it is important that a person knows what they are getting into. Below are some benefits of real estate investing:
Easy to run
It may seem hectic in the beginning since you will have to look for a great house that is in a demanding market. If you are building from scratch, it will be even more tedious as you will have to deal with contractors and make sure that things are moving well. Once you have the building, you will also have to look for tenants. However, once you’ve done all this, the rest is easy. In fact, you can opt to get a property manager to take care of any real estate you may own. This will relieve any pressure from, as you will only have to go pick up your checks.
Property investing offers high leverage. High leverage means that you will only have to raise a small amount of capital to purchase the property. Most banks will easily give you a mortgage loan to buy a house, especially if you have a good credit rating. What’s more, you can organize your payments to suit you as most banks will usually give you a maximum of 25 years to repay the loan. Alternatively, you could also use the money you receive from rent to pay back the loan.
Offers high returns
Property investing also offers high returns for its investors. Most people say that it is expensive to invest in real estate. Whereas this may be true, the higher the cost of the property the higher the returns. Consider a house that was being sold for $250,000. If the market is good, the value could rise by about 10 percent. This means that the investor has earned $25,000 in passive income. Millennials are gobbling up opportunities to get in on the housing market for this purpose.
Offers great tax benefits
People who are engaged in real estate investing are also provided with great tax benefits. All the expenses for the house or building are tax deductible. Furthermore, if you are unable to get tenants and your house was purchased on loan, meaning you have to make mortgage payments, your property won’t be taxed for that year. Also, if the value of repair and maintenance exceed the amount the property is bringing in, and then you are also exempt from paying taxes for that year.
In conclusion, investing in real estate can give you a lot of benefits if you get in the industry. If you’re willing and able, then you can seek more information about the industry and join it freely.