Is Real Estate Really the Best Investment? Check it out!
With the world still recovering from the economic crash there are many people who are wary of placing their hard earned funds into the stock market or property. In fact, property investment has always be a solid investment vehicle, providing you plan for the long term an economic crash will have little or no affect on you. There are many reasons why you should invest in real estate:
The banks are still willing and able to lend funds to people, particularly when it comes to property. Providing you have a down payment their risk is minimal; this means you can easily access cash and leverage it to produce more, by either flipping or leasing the house. Your next step is to diversify. Adding property ownership to your current investment portfolio will ensure you are spreading your risk and are better able to deal with dips in the economy.
Property values can be speculative; a property is worth whatever someone is prepared to pay for it. This can make it a risky proposition if you are looking for a short term venture. However, historically property has steadily risen in price over the long term making it a safe investment opportunity. Alongside this there are a variety of tax savings and offset schemes which can be adopted to save you money! It is best to speak with a tax professional regarding your personal circumstances to get the best advice.
Tax free investing
As the value of the property increases the amount of tax due on the sale of it will increase. However, between depreciation, expenses and mortgage interest deductions the funds you borrow will be tax free. Alongside this it is possible that, particularly during the renovation process, you will have an excess of tax deductions which can actually be set against your other earnings – reducing the amount of tax you currently pay!
Real estate investing – a viable retirement plan
It can be difficult to commit to a monthly savings or pension plan; many people struggle to put enough aside for retirement. However, if you purchase a property you are committing to a long term investment, including the upkeep. In return you are creating a source of income and wealth for your retirement; something you will be grateful for one day!
Property investment can be a full time business, particularly if you are starting out flipping houses in order to increase your capital. However, once you have funds available and as your portfolio increases you will find it takes up less and less of your time. An established portfolio or even owning just a couple of rental properties can give a substantial income for less work than your average part time job.
For those of you who are not cash rich but are busy running a business then utilizing some of the money from the business is an excellent way of getting started in property investment. The risks and rewards are the same; the funds have simply come from a different financial source.
Real estate investment is unique in that you are able to adjust your property to better suit current market trends and demands. This may mean redecorating, extending or even splitting a property into apartments. All improvements made to a property can attract better quality tenants and higher rents; increasing your return on investment.
It is possible to start in real estate investment with very little funds; there are a great many options available to assist with financing your down payment and first rental mortgage. These are all viable options provided you plan your property investment carefully and stick to the plan. Real estate investment can be very lucrative but, like any investment, does carry some risk. It remains one of the best investment opportunities, particularly as it is possible to start with little or no funds.
Make sure to assess more than just one market. Have you ever thought of investing overseas? An Istanbul property for sale can prove to be just as profitable as a property in the US. All you have to do is familiarize yourself with that particular market, and then start negotiating deals.