There are several benefits of investing in real estate. Investors can enjoy predictable cash flow, tax advantages, and the possibility to leverage real estate to build wealth.
Homeownership can help individuals to create an asset to invest in and accumulate their wealth. It seems that one of the great investments nowadays is taking out a mortgage and investing in property-owning a home. It is considered a wise decision because instead of paying rent, homeowners can pay off their debts, and accumulate wealth and a home to live in.
Planning and thinking about investing in real estate? Here are the principles that you should know about real estate and why real estate is considered a good investment.
- A DUAL-PURPOSE INVESTMENT
Aside from getting the said benefits of having a home, it is also considered a smart investment. Numerous experts believe buying a home is a great investment as home values generally increase over time. Also, according to Nadia Evangelou, senior economist with the National Association of Realtors in Washington DC that purchasing a home is often a safe investment that has traditionally been a great inflation hedge to protect against a loss in purchasing power of the dollar.
- VALUABLE SAVINGS
Increasing home equity is a significant part of homeownership as it can be a resource that can be converted to cash when needed. It can be used to pay expenses such as remodeling or any financial needs.
There are numerous ways to build equity in your home. These include making a big down payment, increasing your property’s value, or decreasing your mortgage debt. Knowing how to build equity helps you generate a valuable and significant asset over time.
- PROTECTS FROM AN INFLATION
One of the pros of renting a home is financial freedom. You do not have to struggle with repair and maintenance costs since this is the landlord’s responsibility. You have no responsibility to maintain the rented area. You can just tell your landlord to do all the repairs and maintenance for you. Also, you get more flexibility, you can make a quick decision to move out. However, the rental fee can be increased by your landlord at any time. You can’t build equity also if you’re just renting. It will be your home, but it won’t be your asset. Moreover, there are no tax benefits to renting a home.
On the other side, owning a house can serve as an investment. You can buy it and consider renting it out to earn monthly profits. There are tax benefits also as you can deduct your mortgage interest payment. In addition, you build equity while paying off your loan. Most importantly, you have your privacy.
- TAX CONSIDERATION
Buying a home is energy consuming — it could drain your mind from thinking what the things that should be considered when purchasing a home. Luckily, if you like to find out more about homeownership, shoot me a message or give me a call! I’m more than happy to help you along your path toward homeownership.