If you are someone consider real estate investments for the first time, you might have a lot of questions on your mind. Will you benefit from your investment? Is it the best way to invest my money? Could there be another way to invest money with better chances of a return?
Every person who invests in real estate for the first time has these questions. Let us help you with some of the reasons to help you make up your mind.
Passive Income
If you want to make money from real estate, the first step is figuring out how much of it you’d like to invest in. There are two ways to do this: passive income and active income. Passive income is when someone else manages your property for you and takes care of all the upkeep, repairs, and other responsibilities that come with owning a home or land. Active income is when you have more control over managing your property and collecting rent checks—but it also means having more work on your plate.
Enjoy Capital Appreciation
Capital appreciation is the increase in the value of an asset over time. An investment that has capital appreciation is one where you’re buying something and its value will go up over time. That’s what makes real estate investment a big favorite of people around the world. The price of the land usually goes up.
Yes, you might see phases of slow price rise, but at the end of the day, the price does rise. It is quite rare to see the price of a real estate property, whether residential or commercial, coming down with the passage of time. In fact, even a vacant piece of land continues to appreciate in value overtime and that’s what makes so many people invest in real estate all around the world.
Earn Tax Benefits
You’ve probably heard that real estate investment is a great way to get tax benefits. But do you know what those benefits are? Here are the most common ones:
- Depreciation
- Mortgage interest
- Capital gains
- Property taxes
You can deduct the interest you pay on your mortgage and real estate taxes, which are some of the most common deductions for investors. You can also write off the cost of repairs and maintenance over time as an expense. If you sell your property, you’ll have to pay capital gains tax on any profit. However, if you hold onto it for at least one year before selling, that profit is considered a long-term gain and taxed at lower rates than short-term gains (which are taxed at your regular income tax rate).
Enjoy a Hedge against Inflation
You can protect yourself against inflation by investing in real estate. Real estate is considered a hedge against inflation because it is a tangible asset that you can live in, which makes it an appreciating asset.
This means that it will increase in value over time. The real estate market can be affected by inflation, but it is a long-term investment that should help you protect yourself against inflation.
When you invest with Lior Babazara, you can choose from a variety of real estate types. Through diversification, you lower the risk of losing money even further.
Make Money When You Sell
While it may seem like a lot of money to put into one property, you could recoup your investment several times over depending on how well you do at selling. If the home is in good condition and has been well-maintained, there’s a good chance that it will sell for more than what you paid when you bought it. You can also make money by getting rid of the property tax bill, any maintenance fees and upkeep costs that have accumulated over time.
Don’t Ignore the Risks
While the potential for profit is high, there are also risks involved. If you don’t know what you’re doing, you could lose a lot of money. If you’re not willing to invest a lot of time and effort into your real estate venture, it probably isn’t for you. You may also need to take on debt in order to invest in real estate; this should be kept in mind when deciding whether or not this is something that would work out well for your situation.
Considering these factors, if you want to invest in real estate but don’t have the cash flow or savings account required for buying an entire building outright, consider looking into syndicating properties or becoming a landlord instead—both of which allow investors who only have limited funds available at any given time access to lucrative returns on their investments without having to shell out every penny upfront right away.
Real Estate Investment with Lior Babazara
In conclusion, investing in real estate can be a smart financial decision. It is important to do your research and weigh the pros and cons before making any investment. If you are looking for a way to diversify your portfolio, real estate could be the answer.