Real estate is a popular field and it’s no wonder when you realize how many real estate investors are highly successful.
Investments aren’t just for people who are already rich. They’re for everybody and you don’t need a small fortune to successfully invest in your first few properties.
If you have an interest in real estate and you want to get started with buying your first property, you will need a down payment. However, you can easily raise the money for a small property down payment by saving or fundraising.
Once you’ve got your foot in the door and invested in your first property, you will experience exponential growth (both personal and financial growth). Whether you’re identifying a good 1031 Exchange replacement property or finding housing to eventually rent out to tenants, there’s a successful route into real estate investment for everybody.
Let’s take a look at five of the top benefits of getting started in real estate investment and why it might be the perfect career choice for you.
- Property Values Appreciate Over Time
If you invest in a property for long enough, you will earn more than you originally spent. This is because properties appreciate over time. The longer you own a property, the higher its value, as long as you do the work to properly maintain its structure and interior.
If you renovate the property and keep it modern and stylish, you can increase appreciation even further. Whether you are fixing up the property to sell it or rent it, it’s worth renovating to increase the property’s total value.
The best time to invest in property is when the housing prices are low but in reality, any time is a good time because properties all appreciate over time.
- You Can Take Advantage of Tax Deductions
When you are a real estate investor, there are a few tax deductions that you can claim. When you purchase real estate and rent it out to tenants, you technically run a business. You are earning money from others through your services.
When this is the case, you are subject to self-employment tax deductions and write-offs, the same as every other entrepreneur business owner out there.
Any expenses that you incur related to your investment properties, such as renovations, traveling, or business handling expenses can be written off on your tax return so you end up paying back less money.
- You Have Something to Show for Your Investments
When you’re investing in real estate, you can be proud of everything that you purchased. Although the values of your properties are subject to change based on the fluctuations in the housing market, you have tangible assets and this is worth something!
You will still have a property to sell when you decide to do so. This is not the case when you are investing in something like stocks where you can quickly and easily lose all of your investments.
- You Can Sell Your Properties Whenever You Like
As a real estate investor, you will always be looking to buy and sell properties in order to make a profit. When you want to sell one of your investment properties, you get to decide the selling price.
If you receive offers from various buyers, you are in control of how much money you’re willing to accept. The ball is in your court and you can choose the asking price, based on the market value and the renovations that you have performed on each property.
The same applies if you are renting your property to tenants. You can choose the monthly rental fee and this gives you some sense of control over your total earnings.
- You Can Establish a Great Retirement Plan
If you are concerned about generating a decent retirement fund, you won’t need to worry as a real estate investor. Investing in real estate enables you to earn more as the years pass by because of property appreciation.
As you near retirement, you can sell your properties and earn a large sum of money in a short amount of time. You can use this money to help you through retirement. Unlike many employees who slowly accumulate money in a 401K or IRA, you are earning money from your properties to eventually ‘cash out.’