Why should you consider real estate investment? Well, real estate investment is one of the most popular approaches in order to generate additional income in the world today. As a matter of fact, if you have the knowledge and have seen many news about real estate investment, you can definitely succeed in this career.
If done intelligently and carefully, real estate investment can give you amazing benefits that cannot be obtained in any other kind of investment. Here are the reasons why a real estate investing is a good option:
Markets of real estate are very slow to react even slower than the stock market and like everything else a real estate has its ups and downs. As for example, you won’t discover in the morning that your investment in real estate is worth 10 or 20% less than it was the past day.
The leverage. You can borrow money to buy a real estate property, whereas generally you cannot borrow money in order to buy stocks. Also, you are able to control a large value of dollar in real estate with just a small sum of your money by using the mortgages and loans. However in stock market, by law, it limits the sum of margin (leverage) you can use in order to buy stocks. In real estate, there are no such limits to worry about.
You can purchase a real estate property for less than its true market value. In many real estate cases, you can purchase for as low as 60 – 70 % of its market value. Compared to buying stocks, you may find an undervalued stock, however generally, it is tough to do it again and again on a consistent and regular basis.
Real estate can offer you a remarkable advantage on the amount of tax through the process of depreciation. Basically, a real estate has its two values: the building(s) on the land and the land itself. As for example, if a single property is valued at a price of $250,000 and the land is $75,000, the entire building would be then assessed at $175,000. The government usually allows the real estate investors to make depreciation of their building’s value in equal parts to its useful life which is normally defined at 27.5 years. So, it will go like this, the $175,000 that is mentioned above, its value of depreciation would be at $6,363.63. (The formula used is the assessed value over its useful life). This will only mean that for the purpose of tax, the investor are able to lower his or her annual income by the amount of $6,363.63. Many people think that the idea of depreciation is very confusing since it is not really a money loss. It would be best to consult with a qualified tax professional and ask about the necessary details of such notion.
Probably, if you could done this correctly, real estate would be the one of the wisest investments you could ever make in your entire life. Hopefully, this article had helped you by providing the fresh perspectives of the benefits of investing in real estate business. So be wise, never stop learning and so grab the opportunity now.