Investing in Real Estate
By Jose Parker
Investing in property is a discipline that has created wealth for many people over the years and it remains a solid investment option even in today’s market. If you’re looking for a way to grow your net wealth over time, investing in property is an option that should not be overlooked.
One of the advantages of investing in property is that it is a tangible asset that usually always has some kind of value. property is something that can be touched and used. Because of this, someone will always be willing to pay something for it. With stocks, bonds and other securities, this isn’t always the case. Those are theoretical investments that could potentially be reduced to no value in extreme circumstances.
Another reason that you may want to invest in property is because it allows you to take advantage of leverage. Most investing in property is done with €other people’s money. You typically have to come up with a down payment on the property, but the majority of it is paid for by a lender. When the property grows in value, you only have to pay back the lender what you borrowed, plus interest. Any profit that is generated from the property is yours to keep. This allows you to spread your investment capital around over several properties so that you can make more profit.
Real estate is also attractive as an investment because of the tax breaks that it provides. When you buy investment property, you get to depreciate that property over its useful life, which can result in a large tax deduction each year. You also get to take deductions for the various expenses that you incur to rent out the property and maintain it.
In today’s market, investing in property is even more attractive than normal. Although the property market as a whole is stagnant, it represents a good opportunity for buyers. If you have money to invest, you can get some really good deals on property. Properties are selling for much less than they ordinarily would. This means that you can use the money you have to get more property than you could normally afford. Then when the property market rebounds, you’ll be sitting pretty with property that you bought while it was cheap.
In addition to finding low prices on real estate, you can also get low interest rates on mortgage loans. If you have a good credit score and enough money for a down payment on a property, you can take advantage of historically low interest rates. This will provide you a much lower payment than normal and possibly make it so that you have a positive cash flow on rental properties. Your mortgage payment may be less than what you can collect in rent, which puts money in your pocket each month.
Regardless of your background or experience, investing in property can be a worthwhile end endeavor. As an investor, this represents a good time to get involved and you can potentially grow your wealth for the long-term.
The author of this article covers the basics of why real estate investing has made more people wealthy than any other class of investment. If you are lucky enough to live in the Pittsburgh metro area, then investing in real estate is a no brainer.
(November 2014 Newsletter)