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6 Advantages of Investing in Real Estate

Monday, September 20, 2021

Do you own any investments?

About 63% of Americans currently own investment properties. While this number reflects a decline in all types of investing, you should not follow the trend.

Help secret your future by purchasing some property. Keep reading to learn about six awesome advantages of investing in real estate.

1. Passive Income

When considering income, most people first think of working. But, real estate investments offer a different way to earn.

Passive income refers to money coming in without consistent labor. When you purchase real estate, you do need to put forth effort in protecting the investment, marketing, maintaining the property, and coordinating with tenants.

But, once you get a long-term tenant in, money will come in consistently without you reading to work on a daily basis. If you own multiple rental properties, you may hire property management so that you do not actually work at this at all, but still stream in an income!

Since passive income flows in with less work, it allows you to add other streams. This means that you can focus your productive skills on another business venture, increasing current income overall.

2. Savings

Often, people work to pay their bills. But, they invest in properties to save money for their future.

In the short term, savings allows for big purchases, vacations, and emergency funds. For your future, this means not worrying about how you will live once you retire.

3. More Investment Opportunities

Ironically, investing in the property increases your opportunity to invest in property. You can funnel the money you make from one property into a fund for purchasing your next, increasing your investment power even further. While debt perpetuates debt, money makes money.

4. Tax Perks

Rental properties also come with tax perks. If you can reduce the amount of hard-earned income taken by the government, then why not invest?

The mortgage interest deduction allows homeowners to take interest on up to the first million dollars in mortgage payments. Plus, landlords qualify for a number of deductible expenses that homer owners don't. Other investment property deductions include a travel cost deduction for landlords, depreciation deduction, and a legal fee deduction in the case eviction becomes necessary.

5. Appreciation

As time goes on, property value increases. This occurs because the population continuously increases as available land decreases.

Real estate appreciation helps protect you from losing money on your investment. If you decide to sell the property 20 years down the road, it may go for higher than you paid. 

6. Equity

Equity equals complete assets minus total liabilities. When you purchase a property, you gain equity that provides you financing leverage.

For instance, if you want to take out a loan to purchase another investment property, you can take it out against this current investment, increasing the amount available to you. This provides more opportunity for growth prior to seeing the return on investment.

Start Investing In Real Estate

Begin investing in real estate now! Appreciation on the property makes now a more profitable time than later, so what are you waiting for?

Protect your investment with an insurance policy that best suits your needs. We are excited to serve you, so contact us today!

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