Real estate has become one of the biggest investment sectors due to all the great benefits of it! Whether you’re looking to house flip, or you simply want to own property, there are certainly great benefits no matter which option you choose.
If you’re still on the fence about whether or not you should invest in real estate, we’ll change your mind with the top three reasons why you should.
Reliability
Real estate has been deemed one of the most reliable forms of investing due to the fact the property is tangible and can be held onto if needed. If you are considering purchasing land to develop, ensure you hire a reputable company to perform the necessary environmental site assessments, such as a phase 1 esa, to make sure that the land is going to be suitable for development, and that it won’t have a negative effect on the environment around it.
Let’s say you’ve invested in stocks. If the stock market crashes, you’re pretty much forced to sell out quickly so that you don’t lose all the money that you put in. However, if you invest in real estate and the market isn’t doing so well, you can simply ride it out until its improved. This way, your home will sell for much more! You’re able to handle things at your accord. It’s also very important to understand what’s going on in the real estate market by visiting websites such as https://caborealestateservices.com/los-cabos-residential-real-estate-market-reports/ and other websites that provide you with regular real estate reports. Although you don’t have to sell real estate when prices go down, you should still have a good idea of what your real estate is worth at any given time so you can make informed decisions.
Ever-increasing value
The value of real estate can easily be increased in a number of simple ways, which is why it’s such a great thing to invest in.
By making modifications to a home, or adding amenities, you can greatly increase the value of it! Such modifications include:
- Updated lighting
- Updated countertops
- New fencing
- Hardwood floor installation
- Repainting the home
Aside from physical aspects, the value of a home can increase depending on the selling season, as well as the health of the market. If things are looking slow, or house prices keep falling, simply wait it out until a time that you’ll be able to make more profit in. Based off of history, its seen that the longer you hold on to your property, the more you’ll make from it.
Tax Benefits
When it comes to taxes, real estate investing really works in your financial favor. The interest of mortgages, the cash flow of investment properties, property taxes, and operation costs can all be used towards tax deductions.
Types Of Real Estate Investing
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Fixing and Flipping:
House flipping is the act of buying a run-down or low-value home, renovating it, and putting it back on the market for a higher price in a short amount of time. If you would prefer to flip and then rent out the property, you could instead follow the BRRRR Method, which involves buying, rehabilitating, and then renting the property out.
The time frame for this is usually between 6-12 months. You should plan when you buy a home to flip in accordance with when you intend to sell or rent it. Additionally, you need to prioritize which renovations you should get, and do so according to your budget.
You can find properties to flip through the local Multiple Listing Service (MLS) platforms in your area.
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Buying and Holding
Investors who practice the buy-and-hold typically purchase buildings that have rentable rooms, such apartment or condo complexes, so that they profit both from tenant rent and property appreciation. If you’re looking to keep a property long-term, then this form of real estate investing is perfect for you.
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Commercial Real Estate
Commercial real estate investing involves property that is used for commercial reasons, as opposed to residential. These buildings are most commonly occupied by businesses. The owner of the building leases out offices spaces to business owners, which is how they make a majority of their profit. Commercial real estate also accounts for restaurants and retail shops.
Investors of this type of property greatly benefit from long-term ownership that reels in a good amount of property appreciation.
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Vacation Rental property
Vacation rental property is usually purchased in areas with many attractions that pull in heavy tourism. Some investors like to invest in Tulum Mexico real estate, for example.
Investors who invest in vacation property rent it out in off-seasons to be able to afford it. Depending on the location, and home value, they can upcharge, landing them some extra cash in their pocket.
This type of real estate investing usually the one that is recommended to beginners, seeing as you’re still able to pay it off even while not living in it.
When you’re done using your investment property to make a profit, and you’re ready to put it back on the market, you should do so by listing on the MLS as for sale by owner. In doing so, you’ll be able to make even more money through saving on the commission you’d normally pay to a real estate agent!
Rather than simply save through real estate investing, consider saving long term by making money even after you decide to sell!
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