In the past 60 or so years, the median sales price for American homes has shot up over tenfold from just $17,800 in 1963 to almost $405,000 in 2021. Because prices are only getting higher, you’re considering buying a few additional properties since you’re financially able to.
But is real estate investing worth it? We think so!
Here are 5 benefits of real estate investing you can enjoy.
1. Passive Income
A great way to generate some passive income is to invest in real estate. You can turn these into rental properties so you can enjoy a steady stream of monthly income without having to do much work. This is especially true if you do your due diligence and only rent to reliable and trustworthy tenants.
2. Build Equity
If you need to take out a mortgage for the real estate properties, then you’re building equity for your future every time you pay the mortgage down. If you’re a veteran, then you can also take advantage of things like the VA renovation loan, which can help keep costs down.
Also, judging by how the American housing market is going, your properties will only increase in value. This will also help you build up equity.
Either way, you can use the equity to buy another property and see your profits rise.
3. Protection Against Inflation
There’s always the worry of inflation, but real estate is actually good protection against it. This is because when the cost of everything else rises, your home’s value and how much you can charge for rent will as well.
So should there be inflation, you’ll be more financially secure, thanks to your investment properties. And when compared to stocks, it’s much less volatile, so that adds to the many advantages of real estate investing too.
4. Tax Benefits
There are so many tax benefits that come with owning investment properties. You can deduct things like:
- Property management fees
- Property insurance
- Mortgage interest
- Property taxes
Also, are you planning on selling your properties in the future? If you sell for more than you bought it for, the difference (call “the gain”) won’t be taxed as income, but rather, capital gains. This usually has lower rates.
5. Vacation Home(s)
You can certainly use your investment properties as a source of passive income. But you can also treat them like vacation homes too!
Let’s say a beachside house you own doesn’t currently have tenants. You can easily plan a weekend getaway and stay in your own property.
Enjoy the Benefits of Real Estate Investing
As you can see, there are several benefits of real estate investing. This is just a short list as well!
The reality is, if you’ve got the means to do it, then you should buy real estate. You only stand to profit, especially as the housing crisis will only get worse.
If you to get in on a real estate investment opportunity but want to learn more, then check out the rest of our blog page!