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The Benefits to Real Estate Investment

Posted on Apr 18, 2016

There are many ways to invest money. From stocks to Forex currency exchange, mutual funds to fine art and wine. Everyone has something they are passionate about investing with. However, one of the very best investment options out there rests in real estate. Real estate is one of the oldest investments around, yet it is also one of the wisest. For anyone who is considering moving into the real estate market, there are several different perks they need to educate themselves on.

Continual Cash Flow

One of the problems with other forms of investment is the investor will not make a continual amount of money off of it. Chances are, they will not make money off of the investment until they sell it. For some, this simply is not possible. However, with real estate it does bring in a continual amount of money. People renting out property allows an individual to have money readily available. The added monthly income makes it possible to expand business ventures or to invest in additional property. Plus, the cash flow from real estate is far more stable than other kinds of investments (such as business investments). Outside of the occasional poor tenant not paying rent (which makes up a small percentage of renters), the money is continual. Tony Alvarez has been flipping houses in California since 1981 and he now lives very well off of the continual cash flow from the properties.

Taxes

Few other investments come with the kind of tax benefits as real estate investments. The income made off of rentals is not hit with the self-employment tax, plus there are tax breaks for any kind of depreciation, not to mention other perks. Just about any other form of investment will be hit with self-employment taxes, which can become costly. The Merrills, a married couple, have been flipping homes for 10 years and run the website IBuyAustinHouses.com as the two specialize in properties spread from Texas through southern California. They say avoiding self-employment taxes on real estate saves them tens of thousands of dollars a year.

Someone Else Paying the Mortgage

Wouldn’t it be nice to have someone else pay a personal mortgage? This is exactly what happens when renting real estate properties. This way, the person renting out may actually pay more than what the monthly mortgage is, allowing an individual to pay off their mortgage faster while still turning a profit. It is possible to pay off the entire property with rent and never actually pay a cent for the property. This puts money into the investor’s pocket and makes sure they build equity in their property.

Inflation is Good

Inflation, in most cases, is bad. From buying a loaf of bread to buying a new car, inflation is expensive. However, the property will increases along with inflation. Few other investments do this