Investors

Invest in Real Estate, Yes!

Where to Start?

Investing in real estate is a great way to make money and build wealth. While not necessarily easy, experience can be a good beginning.

Experience?

How do you get experience?

if you are just getting started or looking to try something new, find an expert. Maybe someone who is already doing what you want to do.  Be careful though, real estate can be competitive.  If you have a great idea, another investor might jump on it or they might worry you will take an opportunity away from them. But, as long as you are not stepping on their toes, they might be glad to share what they have learned.

It might be simpler just to contact a real estate agent or brokerage whose business has been to work with others investing in real estate. Real estate agents frequently help new investors get up and running. Regardless of how you start, the key to getting  started is easy – Experience.

Four Simple Reasons You Should Be Investing In Real Estate.

What does a real estate investment mean to you? Obviously, there is the income a property generates. The income is often called “cash flow”.  Money coming in is always good, but there is a lot more to a real estate investment.

A real estate investment can be leveraged. People will loan you money to buy real estate. By being able to borrow to invest you can multiply the value of your investment. Each month you collect rent from the real estate, you payback a little bit of what you borrowed, buying a small portion of the real estate.

The tax code helps you out too. The value of the improvements can be depreciated. That is, the value is divided by the expected number of years of the improvements productive life. This amount of the income is tax free.

With any luck, as time passes, as you pay off the borrowed money, the value of the property will increase. This is called appreciation. Often it is gradual, almost undetectable, but not insignificant. In 10-20 years, a property’s market value could very conceivably double.

Your real estate agent should be able to provide information on the real estate’s past financial performance. If you have questions about what this information will mean for you, your accountant can help interpret it for you.

What makes real estate a good investment?

  • Real estate builds wealth. Either directly or indirectly, everything grows on, or is extracted from real estate. It is the economy’s foundation. It is a limited commodity.
  • Real estate’s importance is recognized by the special way it is organized, taxed and purchased. The secret to successful real estate investing is understanding these fundamentals.
  • Real estate can generate income.
  • Real estate can be leveraged. That means you can borrow money to purchase it.
  • Real estate has favorable taxation, and…
  • Real Estate can appreciate.

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