6 Benefits of Investing in Real Estate Property
Although you might be tempted to sell your house for cash after you've gotten it ready for the market, you might be better off keeping it as a real estate investment. Here are just six reasons why real estate might be one of the best investments you can make.
1. A Steady Income
Most people who invest in real estate earn money through rental properties. This is a great source of passive income, and it is often the biggest incentive for those who want to get started with investing in real estate. Property in urban and suburban areas often yields the best results, especially if those areas are near a college campus. If you invest in the right property in the right location, you can have a steady flow of income for years.
2. Protection Against Inflation
The housing market can fluctuate greatly, and there may come a time when it's just too difficult to sell your house for cash. Fortunately, you have less to worry about if you've made some sound real estate investments. While inflation can make it difficult to buy and sell property, it actually increases the cash flow you receive from your existing investments. As long as your tenants are willing to stay where they are, you can still receive a steady income even in a difficult economy.
3. Expenses are Covered
Paying a mortgage on a home can be expensive, whether you're living in that home or leasing it to someone else. Fortunately, the income you receive from your rental properties can cover any mortgage payments that need to be made. As with any other source of income, you need to make wise investments to ensure that all of your expenses are covered, but not having to worry about making a mortgage payment every month can feel like a godsend.
4. You Can Help Your Community
While you can't expect anyone to live in your properties for free if you want to profit from them, you can still help your community by making your rental properties more affordable. Anyone who has had to find a place to live on a budget can tell you how hard it is to find affordable housing, so providing that can be a great way to help out someone in need.
5. Diversifying Your Portfolio
If you already have other investments such as stocks and bonds, real estate property can be a great way to diversify your portfolio and mitigate risk. Losses usually occur with any kind of investment, so having a more diverse investment portfolio is practically a must if you want to offset most of those losses.
6. Tax Benefits
Having real estate property allows you to qualify for many different tax benefits. Almost all of the costs of owning real estate property can be written off as business expenses, including mortgage interest. With the right kinds of investments, you might even be able to avoid paying self-employment income taxes on your rental income.