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Benefits of Investing in Real Estate

Although real estate can be risky as any other investment, it has many more benefits. Here are a few top reasons you should consider adding this investment to your portfolio. 

Tax Advantages

Industry experts, such as Stefan Soloviev, explain that there are plenty of tax benefits. When you own an investment property, you can deduct taxes, mortgage interest, management fees, insurance, maintenance, repairs, and marketing costs. Plus, when you sell a property, the money you make off the sale isn’t considered income. Instead, it is considered capital gains, which fall into a lower tax percentage. When you invest in certain areas, you’ll pay even less. 

Steady Cash Flow

You can increase your income with real estate. You can rent commercial and residential spaces to tenants who pay you monthly. However, it is best to hire a rental agent certified by your state commission to avoid tenants who won’t reliably pay you. 

Great Returns

When you continuously improve a property, you might sell for more than you paid. However, appreciation isn’t guaranteed. Doing some research can help you find properties that can be improved and will provide great returns. 

Long-Term Security

You can hold onto properties for several years so that they raise in value, making it a long-term investment. Then, while waiting for the price to go up, you can rent it out, making money in the short term. 

Diverse Portfolios

You can add real estate to an existing investment portfolio, which can be helpful during troubling economic times. For example, some of your stocks may cause you to lose money during a recession. However, your investment properties could continue to appreciate throughout this time. 

Passive Income

Investing in properties brings you income that doesn’t require work. For example, you’re going to charge your tenants rent every month. The checks that they hand you are passive income. 

Leveraged Funds

Most people can’t pay for an investment property upfront. For example, the home that you plan to turn into a rental could cost more than $200,000. Fortunately, you have leveraged funds. In real estate, that means mortgages. Those allow you to purchase properties with other people’s money and make payments over time. That will enable you to buy your investments without paying the total price upfront. 

Investment properties come with a lot of benefits. Commercial and residential buildings can bring plenty of income. In addition, there are plenty of other reasons why you should consider buying investment properties.