Real estate has long been considered a solid investment for many reasons. It is a relatively safe and easy way for people to build wealth beginning with a small amount of money. If you are interested in investing in real estate, I’d be happy to help you find the right properties.
Here are some of the ways investing in property can help you build an investment portfolio.
Investing in rental properties is relatively easy as expenses are predictable and if your properties remain occupied you know what to expect in terms of profit margin.
Real estate consistently appreciates, even during economic downturns, making it one of the more reliable investments. On average, real estate in the US appreciates between 3-5% annually.
If you have been paying on your mortgage throughout your working years, you will experience greater cash flow as you near the end of your mortgage term and the principal is paid off.
When you sell your property, you are taxed short- or long-term capital gains which are usually lower than income tax brackets.
One of the most attractive reasons for investing in real estate is the ability to leverage your money. When you take out a mortgage to purchase property you reduce the amount of capital required. As you build up equity in the property, you borrow against the equity or refinance the original loan, freeing up cash to buy another property.
Unlike an investment in stock, where you have no control over how it performs, you can improve upon your real estate investment. Updating or upgrading systems, finishes, appliances, and landscaping helps build value in your investment.
Under the 1031 exchange tax code, you can invest the gains from the sale in one property to the purchase of another property without paying taxes on those gains.
You can legally claim a depreciation expense on an investment property. You can depreciate expenses even though the value of your investment property is appreciating overall in the market. This deduction allows investors to generate a higher cash flow while reporting a lower income for tax purposes.
@2021 HARMON HOME TEAM
1610 West End Ave., Ste 115, Nashville TN 37203 | 615.522.5100
1610 West End Ave., Ste 115, Nashville TN 37203
@2020 HARMON HOME TEAM