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Real Estate Investing: Why and When Should I?

Real Estate Investing: Why and When Should I?

Contra Costa County Real Estate | East Bay Homes

Real Estate Investing: Why and When Should I?

What is real estate investing?

Real estate investing is the purchase, ownership, rent, or trade of land and any structure on it in order to earn wealth over time. It is common for people to own multiple investment properties and rent them out or fix them up and sell them. When done properly, real estate is one of the most admired and gainful investments with a lot of potential for success. Investing in real estate offers lots of advantages, and investors can enjoy a stable income flow that may lead to monetary freedom.

 

Benefits of real estate investing

What are the benefits of investing in property?

 

1.     You can build equity for the future

One of the main advantages of investing in real estate is being able to construct equity. Equity is an advantage that is part of your net worth. When you pay off your mortgage, you make equity. As you construct equity, you now have control to acquire added rental properties and increase your cash flow.

 

2.     You can generate passive income

By investing in the real estate, you can create passive income that is almost tax-free. Your leasing properties will work for you even when you are sleeping. By purchasing several rental properties that create enough income to cover your expenses, you have the liberty to do what you enjoy, instead of spending all of your time at your job.

 

3.     It can provide cash flow for retirement

Real estate investing, when done correctly, is a steady way to boost wealth over some time. Among the many benefits of real estate investing is that it can offer cash flow for retirement. This means it can lend a hand during your retirement years with revenue from your rental properties.

 

4.     Real estate is improvable

One of the most exclusive and attractive benefits of real estate is that it is improvable. Because real estate is a tangible asset prepared of wood, brick, concrete, and glass you can progress the value of any property with some “sweat equity”. Whether the maintenance is structural or cosmetic, do it yourself or employ someone, the principle is the same. You can grow your property’s worth by improving it over time.

 

5.     Real estate is tax deductible

Tax codes permit various deductions for the standard expenses incurred in owning real estate, such as property preservation, maintenance, enhancements and even the interest paid on the mortgage. The deductions can offset income and lessen your overall taxes.

 

6.     Real estate has a lower tax rate

If your investment property is sold after a year, the gain is subject matter to capital gains tax charges. Depending upon your tax bracket, that can be generally 15% or 20%, which is usually lower than the average tax bracket.

 

When should I invest in real estate?

Winter is the finest time to purchase a home compared to the other 3 seasons during the year. Why? There are many reasons!

1.     Less buyer competition

Fewer buyers reduce your risk of challenging against all-cash, over-asking value offers and increase your negotiating authority with sellers. This year, resolve to start your investment property search while everybody else is still inside binging Netflix and re-watching “Game of Thrones.”

 

2.     Lower sale prices

Though the growth in home prices is projected to slow in 2019, values will continue to rise. The constant upswing in home prices makes purchasing in January and February—when trade prices reach their annual lowest point—all the more attractive.

 

If you want to invest in real estate and have any questions regarding it, feel free to contact the Laura Wucher Real Estate team.

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