Investing in Real Estate: The In's and Out's
September 26, 2024 - Dayle Stahl
Investing in real estate can be a significant part of building wealth and achieving financial stability. It can be an unknown and scary thing to do, especially if you’ve never done it before, but growth and development is supposed to be scary and investing in real estate is a key component in building wealth that will sustain for many generations to come.
First off, Real estate is a physical asset that can provide security and intrinsic value, unlike stocks or bonds, which can fluctuate dramatically in value. Having intrinsic value helps investors assess the true worth of your property, based on fundamentals rather than market price, leading to informed investment decisions. In other words, owning property can help you secure other investments in the future.
Investing in property also has one of the greatest appreciation potentials. Historically, real estate tends to appreciate over time. This means that property value can increase, providing a potential profit when sold. Just be mindful when you buy a piece of ground of where the property is located and make sure to do your homework and look for any red flags that might make the property depreciate including lack of access, location issues, future zoning changes, & environmental issues.
Some property investments can also create cash flow. Rental properties can generate consistent cash flow, offering a reliable source of income. This can help cover mortgage payments, maintenance costs, and provide a profit. There are many different and creative ways to create cash flow on investment properties today, which makes creating cash flow easier to do.
We all hate paying taxes, yuck! Who doesn’t love tax benefits? Real estate investors can benefit from various tax deductions, such as mortgage interest, property depreciation, and certain expenses related to property management.
Owning real estate often acts as a hedge against inflation. As the cost of living rises, so do property values and rental income. While we have no control over inflation, we can control and manage our own property which unlike other investments, real estate gives you more control over your asset. You can make decisions that affect its value, such as renovations or changes in management.
Finally, one of the biggest plusses for investing in real estate is legacy building. Real estate can be a means of building generational wealth. Properties can be passed down to heirs, providing long-term financial stability for future generations.
Investing in real estate offers numerous benefits, making it an attractive option for those looking to build wealth and secure their financial future. However, it’s essential to conduct thorough research and understand the market dynamics to make informed decisions.
Don’t hesitate to track someone down who knows the ins and outs of real estate investments and pick their brains before you decide on your first investment.
