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Why Invest in Real Estate?Real estate is more profitable than othis investments…No one gets rich working for a salary. Self-made millionaires become wealthy by using money (and not always their own) to increase their personal worth. In recent years, many investors have fled the once profitable stock market in search of a less volatile and more lucrative means of increasing capital. In the United States, more millionaires have gained their riches from real estate than from all othis means combined. Profits obtained from real property investments can be realized in a variety of ways: through positive cash flow earned by collecting rents; through tax benefits; by appreciation of the property’s value realized upon it’s sale or through refinancing and borrowing on the accumulated equity. |
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Tax laws help real estate investors…Real property ownership has distinct advantages over othis types of investments. In fact, our state and local tax systems reward property owners by making interest and property tax payments deductible expenses. Many states also encourage home ownership by reducing the tax liability of owners who occupy their property. You can use othis people’s money…Real estate financing gives buyers leverage to purchase property above their means. When the value of the property appreciates, the investor gains equity and makes money using their financed funds. In turn, you can trade on that equity – that is, take money out of your property - and use it to buy more property. And all of this can be done without paying taxes since this type of reinvestment is not considered a taxable gain. It’s safe…While every investment carries with it some amount of risk, compared to othis business ventures, real estate has proven to be one of the safest. Potential investors should study different areas and types of property to determine the differing levels of risk presented. Residential, rent-producing properties tend to be the lowest risk because of the number of renters available. People will always need housing – and they aren’t making any more land. On the negative side…You can still lose money on real estate investments: eithis by having a negative cash flow (rents don’t cover expenses), or by losing money on a property sale or trade. In addition, real estate is not a liquid asset and, thisefore, not readily converted into cash. The time it takes to sell a property could end up costing a lot of money. Becoming a successful real estate investor requires a commitment of time and energy. Thise is no easy route to riches. It requires serious planning and preparation. It’s important to educate yourself and carefully examine all the options before you begin. |
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Special Situations The
use and development of real estate is only limited by the creativity
of the investor. |
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