Real estate is one of the most lucrative and beneficial investment opportunities there is. Of course, it can be risky, but the benefits outweigh the risks for most people. Real estate can be a great way to earn a passive income and increase your wealth, allowing you to live a life of luxury and save for a cushy retirement.
From renting and house flipping to investing in commercial real estate, there are many ways to make money in this lucrative industry. Regardless of the type of real estate you choose, you’ll likely get to enjoy the following perks as a property owner:
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1. Real Estate Builds Wealth
If you do it right, real estate investing can be a lucrative opportunity with long-term passive income potential. As you pay off your mortgage or the value of the property increases, you build up equity that you can use to your advantage later on.
Whether it’s selling the property for much more than your purchase price, working with property investment advisors to buy more properties, or cashing out with a refinance loan, there are many ways to increase your wealth. As the equity you have in your investment properties continues to accrue, it gives you even more options for developing your portfolio.
2. Rental Properties Guard Against Inflation
We fight a constant battle against inflation, but if you own rental properties, you have a built-in safeguard against it. This is how it works: As prices increase and the value of the all-mighty dollar decreases, the income you earn from your rental property increases as well. This is because as home prices in the area rise, it makes sense that rent will rise as well, safeguarding you (the landlord) from the nasty effects of inflation.
3. Real Estate Investing Can Result in a Steady Stream of Income
Real estate investing – especially residential and commercial rental properties – usually offers a steady, reliable income that you can use to supplement your 9-5 job, save for retirement, or create a totally self-sufficient career as a real estate investor. This semi-passive income can safeguard you against uncertainty and help you branch out in your career by providing a financial buffer when you want to do adventurous things.
4. You Do Your Part to Support Your Community
Being a real estate investor can help you be a positive community contributor. You’ll provide housing opportunities and stability for local residents, increase city tax income, and support the local economy.
The nice thing about this is that the more the community thrives, the more your assets will be worth. This beneficial cycle is a win-win for everyone, enabling you to build wealth and financial security.
5. You Get to Take Advantage of Certain Tax Breaks
As a real estate investor, you become eligible for some valuable tax breaks that let you keep more money in your pocket. For example, you can deduct your mortgage interest, and you might even be able to avoid the self-employment income tax, depending on how you operate your business. Also, depreciation capture is another tax break that may save you a lot of money each year.
Real estate investing can be a lucrative side hustle or career if you play your cards right. As with any investment, there are risks involved, but for many investors, the benefits outweigh the risks. If you’re thinking of investing in real estate, you have several options, each with a host of benefits as listed above. From increasing wealth to being eligible for valuable tax breaks, real estate investing can be your ticket to success.
Alex is fascinated with “understanding” people. It’s actually what drives everything he does. He believes in a thoughtful exploration of how you shape your thoughts, experience of the world.