Real estate investing is a proven way of building wealth over an extended period of time. Whether you’re seeking to become a full-time property investor, or simply looking to set up for retirement, your financial goals can be achieved faster through the housing market. Even if you’re not entrepreneurially inclined, consider the following benefits that come with investing your money in real estate.
Income and Inflation
Let’s start with the most obvious reason: real estate investment offers additional – and steady – cash flow for property investors. Granted, rental properties come with expenses, such as interest repayments and maintenance costs, but the income from a lease will soon offset these expenses and lead to long-term profits. This is particularly true in urban areas where demand for property is high. If you choose your investment wisely, your positive cash flow will grow and you’ll be rewarded with long-term financial security. Additionally, the benefits of real estate investments help offset the costs of inflation. As the cost of living climbs, so does your property value and cash flow.
Earning profit through property comes with a host of tax benefits too. Money spent on your property, including the interest paid on your home loan, is nearly always deductible. Rental properties also come complete with various opportunities to claim deductions, while the money earned from leasing is not generally considered as earned income, leading to further savings. Depreciation is another factor that works in your favor come tax season.
Whether you have been in real estate for decades or are just starting out, you should understand that real estate is part of a long-term investment plan. And, the good news is that the value of property generally climbs in the long run. There are bound to be some bumps along the way, as house values fluctuate according to various economic factors, but remember that real estate is all about looking toward the future. Yes, history teaches us that property prices go up – not down – over time.
An often-overlooked perk of having a real estate investing business is the flexibility it offers. You can either dive deep into the game and become a full-time property investor who works their own schedule, or treat it as a part-time pursuit that allows you to maintain your normal career, while generating additional cash flow on the side. Either way, you choose which property to invest in, who lives there and how much you charge – you are the boss.
Many real estate investors start out part-time, while keeping their full-time jobs. This tends to work out well. Some, after getting their feet wet, will step into investing full-time, usually becoming quite passionate about their endeavor.
Do what you feel works for you at this time in life. You can begin part-time, and take it from there. Don’t think of it as a “right or wrong” issue. Real estate investing is a good decision, and makes good money sense, so whether you’re doing it full or part time, it’s great that you’re doing it!