Tip & How-To about KoolAppz Investing in Real Estate

Reasons for Investing in Real Estate



Taking a look at the country, it is evident that the housing market is well on the mend. With the steady rise of prices, now may be a good time to think of adding real estate to your investment portfolio. People often link the global economic recession of 2008 to the United States subprime mortgages and the housing bubble. After the recession, there was a whole lot of negative sentiment over the proper investment sector, and few happened to be interested in taking advantage of the sector, in a positive sense.

The fact remains that real estate investment is more like the acquisition of a future income stream from a property. Many of those who happen to be successful in real estate possess the ability to predict the trends in real estate or even the developments that will take place in a particular area. Although some properties may not seem like great money makers, but with certain changes in migration patterns, environment or eve and city developments, they may eventually turn out to be excellent investments. A lot of folks seem to be concerned about the reasons for investing in properties or they ask the question "why to invest in real estate?" others tend to be concerned about how to be a real estate investor. No one can blame their curiosity, taking a look at what happened to the property investment sector a decade ago. However, you should know that real estate investing for the US market is very lucrative right now, especially in states like Texas, Michigan, and Florida.

So, I guess you might still be thinking of reasons to invest in properties, well, here are top ten reasons people consider property investment.

1. Real Estate Values Appreciate. Now this is huge. Real estate values appreciate especially for areas where there is a high demand for properties. For instance, Condominiums in cosmopolitan and highly populated cities can be costly, but it is very unlikely for these properties to depreciate especially if they are well maintained. Thanks to the ever-growing world population as well as the increasing population count in cities, there will always be a constant demand for housing. It's now left to you to decide whether you want to be the one renting in future or if you'll be the one renting out the available space.

2. Real Estate Investment offers great profit. Investing in properties is a proven method of increasing net worth, and with a few sound decisions, one can earn significant profits.

3. Real Estate can Provide Steady Income. That's right folks. As long as you have made a sound investment, you can recoup your investment from the income the said property will generate in a fairly good period. You, however, need to set apart some of the revenue for necessary repairs but generally, you are sure to earn reasonable money on your investment.

4. Investing in Real Estate Involves Low Risk. This is especially true if you have done your research and invest in good properties. Of course, you will definitely need a considerable amount of money venture into real estate. However, you can be sure that your money is now a tangible asset.You can even purchase a property under a financing arrangement, so you don't have to use up all your savings. Some financing companies will permit you to use the property as leverage for your loan. But for this to work, you must have good credit history.

5. Real Estate Property is a Tangible Asset. When you invest in real estate, you can be sure of having a tangible asset, compared to when you invest in stocks where if you don't play your game the right way, you can lose your hard earned cash. In real estate investing, even if you fail to make good profits, you won't lose all your money or investment.

6. Government Tax Breaks. In the United States, real estate investors take advantage of the 1031 exchange. The 1031 exchange allows for investors not to pay taxes on profits made from real estate sales for as long as the money was re-invested to real estate.

7. Increased Tax Deduction Strategies. As a real estate, you have the opportunity to convert personal expenses to valid business deductions. Always remember that rental real estate is a business. This implies that travel expenses to check on your properties, as well as payments to family members who take care of your properties, can be deductible and improve the tax benefits when it comes to earning cash as well as the future sale of the building.

8. Tax-free Cash Flow. Thanks to depreciation and mortgage interest deductions, your cash flow is sure to be tax-free. Now that's the life. In real estate, an investor will never pay taxes on their cash flow and they sure can wait for extra capital profits on the sale of the property in the future.

9. Controlled Profits. As an investor, there are many ways you can control the profit you make from a real estate property. An example could be when you improve a house to raise its value. You may purchase properties that are in need of repairs and renovate the building so you can sell it off or put it up for rent to earn a better profit.

How To A Successful Real Estate Investor

A lot of people always tend to ask "how to be a real estate investor." now that's a good question. However, you should be more concerned about how you can become a successful real estate investor. To become a successful real estate investor, you need to determine what you plan to achieve through real estate investing. Let's look at some ways you can be successful in property investment.

• Do your homework. Get a better idea of the real estate market you plan to invest.

• Put your ideas in writing. Always remember to list out your real estate investment plan on paper.

• Come up with an exit plan for each property you are interested in acquiring.

• Get your team together. Assemble a professional team to assist you in real estate investing.

• Set aside some time to work on your property investment goals.

So there you have it, folks. So far we have explored various reasons for investing in properties, and we believe that our suggestions are sure to be convincing enough to help you understand how you can take advantage of this lucrative sector.

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Herman Rosenfeld is a retired CAW activist living in Toronto.


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