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Home · Guides · What Are the Benefits of Investment Properties?

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What Are the Benefits of Investment Properties?

There are a number of ways that you can plan for your financial future. Putting money into savings, having a good retirement account and even property investment can all help you to ensure that you are ready for your golden years. If you have been considering investing in real estate, there are a few benefits that you may want to keep in mind.

Investing in property is a good way to enjoy additional cash flow and this is the main reason that many investors choose real estate. The income that you can generate from rental properties, after your expenses are paid, can be significant depending on the number of properties that you own as well as a few other factors. You can also enjoy appreciation or capital gain when you choose to invest in real estate.

Many investors choose real estate because of the leverage that is offers. You can use this leverage to invest in properties and this is the only investment industry that offers this benefit. You can for instance, purchase stocks at $100,000 and they would cost you exactly $100,000. However, you can purchase $100,000 worth of real estate and only have to pay about $20,000 upfront. You have the ability to purchase more real estate than you have money available which is a major advantage for investors. When prices increase, you are making more money on less of an investment than with any other investment choice.

There are fewer out of pocket costs related to buying real estate than other investment choices as well. Real estate also offers a bit of a buffer against inflation. While goods and services will increase when prices go up, a monthly mortgage payment will not change just because of inflation. The payment will be fixed monthly so no matter how much prices increase, you will be paying the same amount every month. You can raise the rent that you are charging when prices increase but your own payments will remain the same.

Finally, investing in real estate offers a number of tax incentives. You can enjoy various deductions for depreciation as well as business expenses. When it comes time to file your taxes, you may be amazed at the number of deductions that you can claim simply because you have chosen to invest in properties as opposed to other investments.

Many investors choose real estate as a means of securing their financial futures. With the many tax benefits and the obvious income that you can generate, it is certainly no surprise that this has become a major way of life for some people. Many choose to invest in properties and then flip those properties to turn a profit. This is also a good way to place your money for future income but those who choose rental properties clearly have the advantage. If you are looking for a long term investment and one that will pay off now as well as years in the future, real estate is certainly the way to go.

11.04.2013. 07:45


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