According to Mark Roemer Oakland, real estate investment has developed into an evergreen trend due to a number of reasons. With a little research and the correct preparation, you can diversify your portfolio and improve your capital gains without fail.
Here are a few reasons why you should invest in real properties:
- It’s great for retirement savings – Long-term investments are not only more secure but can be a great choice for retirement savings as well. And real estate investments deliver better results when you invest in them for the long term. The best part is that you get more equity in your property as it gets older, and you can decide to sell the property and use the profits to plan for a sound retirement.
Thus, when you invest in real estate, you don’t need to put all your money in 401K or IRA and you can even rent out the property to get some additional money every month, essentially reducing the burden on your investment. Just be sure to consult a tax professional before selling your property to understand how to minimize the tax on capital gains.
- You can leverage equity – One of the best parts of investing in real estate is that you can leverage the equity in your property to invest in other projects. For instance, when you renovate the property to increase its valuation or contribute towards the balance by paying the mortgage interest, you can use up to 80% of the equity to invest in more real estate. As a result, you don’t have to save enough money to pay for the down payment of another home.
- You can become eligible for tax deductions – Generally, you cannot enjoy many tax deductions if you live in a property that you own. At most, you would be eligible for tax deduction only if you itemize certain things such as property taxes and mortgage interest. However, when you rent out real estate or buy and hold it, it accounts as a business instead of just an investment.
As a result, you become eligible for tax deductions similar to owning brick and mortar stores. This means you can write off deductions for conducting the business, handling the business, and maintaining the business as well. As a result, you get to enjoy more money in profits by reducing your tax liability.
- You have a lot of options – There are a lot of ways to make money by investing in real estate. Many people just like to purchase and hold real estate in order to rent it out and enjoy a smooth, monthly cash flow. Others like to purchase undervalued properties, renovate them, and sell them for profit. This is known as fixing and flipping and can be done in as little as six months. You can do this as many times you want until you hit your desired income goals for the year.
According to Mark Roemer Oakland, you don’t need a ton of money to invest in real estate. All you need is a suitable real estate agent that can get you the best deals on the market.