Hi everyone! It’s Michael Gortenburg here.
As many face financial difficulty in the wake of the pandemic, you may look for ways to boost your income. Real estate provides great benefits for those looking to diversify their portfolio and avoid riskier investments. Here are five reasons why you should invest in real estate:
Tax Benefits
When tax season arrives, real estate investors are able to write off fees for managing their properties. The costs of owning and operating can provide some decent tax breaks. If you’re able to sell your property for more than what you bought it for, then it won’t be counted as taxed income.
Chance to Build Capital
If you invest in the right properties, you’ll be able to expand your capital by selling it once its value has risen. One of the main goals of investing in real estate is to build out capital, or cash. What’s important is making sure you’re investing in the right properties and knowing the right time to sell.
Diversification
In times of economic turmoil, such as the one we’re currently facing, diversification can be key to protecting you from riskier financial investments. If certain stocks are facing a downturn, your real estate could still be increasing in value, protecting you from greater financial harm.
Stable Cash Flow
Renting out property to tenants is a good source of additional monthly income. After mortgage payments and any supplemental operating costs, the additional profit leftover is yours to take. Just make sure you’re renting out to reliable tenants. You don’t want to constantly be short of a check by the end of the month and have to cut into your own funds.
Inflation Protection
As inflation increases prices, property values also increase. You’ll be able to make more for higher operating expenses in order to compensate where you’re paying more in other areas.
Figure out what kind of real estate investment is right for you. Do you want to rent out a property to families or business owners? The most important thing when investing in real estate is choosing the property that aligns with you and your goals. You’ll want to choose a property that will ideally move up in value instead of depreciating. Either way, you’ll be able to expand your financial resume and receive several financial benefits.
If you want to learn about ways to boost the resale value of property you already own, read my blog here about home renovations I recommend.
Michael Gortenburg, Founding Principal of Eighteen Capital Group (18CG) in Kansas City, Missouri.
Michael Gortenburg 