Investing in real estate is profitable but only if you invest in the right property. You can enjoy predictable cash flow, tax advantages, and excellent returns from real estate investment. One of the ways investors identify a property that is worth investing in is by using a very powerful investing rule of thumb which I want to introduce to you now: The 1% Rule.
Every single day, more and more people are beginning to gain interest in real estate investing because of the several benefits that it has to offer. It can be an excellent addition to an investment portfolio and a way to diversify your investments to secure cash flow. Not to mention, one of the benefits of investing in real estate is that it offers greater asset stability due to the real estate market generally being less volatile than say the stock market.
Real Estate Benefits
Investors like real estate because of the stable returns that stem from rental income and property appreciation. Buying a real estate property in the right location can give you a steady flow of cash for a long time and you can even be a tool you use to save for retirement. This is a form of passive income and you can generate more income by investing in multiple rental properties at once. In terms of appreciation, buying in the right location and having the property be a desirable one are some of the core tenets of successful real estate investing. But the benefits continue!
Real estate investing also comes with some tax benefits as well! The income you earn from your rental property is not taxed as an income tax. In addition to this, real estate owners can benefit from tax breaks by depreciating the value of their property. Some extra costs associated with management can also be deducted for the purpose of tax, like the cost of electricity, internet, and water.
If you invest in real estate in a good location, the payment you receive each month from your tenants should be enough to cover your mortgage leaving you with some profit to enjoy as well. Moreover, real estate can offer you protection against inflation since you can slowly increase your rents to keep up with increased costs of living in your local marketplace.