4 reasons to consider Investment Properties
Investing in apartment buildings, commercial properties, and single-family homes can have endless benefits, but also come with some risk. While we hope that the value of our investments is always increasing, that is not always the case. Real estate investments, like all investments – don’t always pay off. It is always possible that the property you invest in could lose value over time.
Now that you understand that there are risks associated with investing in real estate, let’s get into the benefits.
Real estate is a strong resource for building your investment portfolio. The biggest decision in real estate investment is determining if you will invest in residential or commercial properties. Here are four benefits of investing in either type of real estate.
1. Regular Passive Income
If you use your investment property as a rental, you can receive monthly income from your tenant. Unlike other investments, property investment offers immediate cash returns as soon as you start renting it. This is a great way to secure consistent cash flow and monthly income from your real estate investment. Managing your rental property can require some additional investment for maintenance, but those costs can be minimal if properly managed.
2. Tax Benefits
Investors are often looking for an investment strategy that will allow them to avoid unnecessary taxes. Luckily, real estate investments offer a range of tax benefits. These tax breaks and benefits are based on location, however, in most cases you will be able to deduct a lot of costs. For rental properties, you will likely be able to save in taxes by deducting the expenses associated with your investment property.
3. Protection Against Inflation
We’re all familiar with inflation and the effect it can have on the economy. Real estate investments are one of the few investment types that can be protected against the effects of inflation. If you consistently adjust your rental income to reflect the current demand, you will be shielded from inflations financial impact. House values and rent prices generally rise with the prices of other things, allowing you to make those price adjustments as necessary.
4. Long-Term Growth
Real estate investment can offer immediate income with rental opportunities, but it is also a great long-term investment. Depending on the property you choose, it will increase in value over time. When you are ready to sell, you will be able to earn a profit.
– Duane Springsteel