But that doesn’t mean navigating there is impossible. Those who reach fiscal sovereignty, at least before retirement age, are those that invest wisely. Invest your time wisely and read about these benefits of investing in real estate.
Safety in the Long-Run
Owning real estate is one of the safest assets to hold. Recessions can waver the market to some degree, but in the end, housing is safe.
Owning rental units or other properties is immune to harsh economies for one reason: demand. There’s a growing population of people that’ll always need a place to live.
There will be dips in the market, but don’t let them worry you. Property is in limited supply. And it faces an ever-growing rise in demand for it.
Renting to Own It
One of the benefits of having rental properties is that it’s practically a free return-on-investment. Tenants, especially in high-demand areas, cover the cost (and then some) of your mortgage.
When it’s all paid off, it would be your renters that bore the brunt of the cost. This is assuming a continuous tenancy, however. This is why keeping your renters happy, and in your home, is prudent.
Inflating Your Cashflow
One of the benefits of owning properties is, ironically, inflation. This time, the shoe is on the other foot: you own what you’re selling.
When the price of a carton of milk and a Snicker’s bar goes up, so shall your cashflow. This can be in the form of an increase in rental payments. Or, if you sell, you’ll see a nice return during an inflated market.
But beware, having more money in an inflated market doesn’t mean a whole lot. Take this time to save the cash or reinvest wisely.
Benefits of Investing in Real Estate Include Avoiding Tax!
Well, not quite. But close enough.
Investors that own rental properties aren’t subject to self-employment taxes. So, the money you rake in isn’t subject to this tax. But, nobody’s safe from capital gains and income.
If you’re looking to penny-pinch further, Google “what is a DST?” It’s a rabbit hole of legalese, but it functions like an LLC (a pass-through corp) that shields you from taxes.
Additionally, all housework can be deducted. Need a roof for your rental house? No problem, it’s a business deduction.
Income Without Trying
Saved the best for last. Owning properties and real estate investing is a steady source of cash. Better yet, it doesn’t involve lifting a finger.
The real smart investors hire property management companies to oversee their mini-empire. Property managers only take a small percentage of your revenue — around 1-2%.
Sold?
The benefits of investing in real estate are insurmountable.
They’re incredibly safe ROIs that have the additional cash flow of tenancy and tax shields. They also carry the additional benefits of being practically paid for by renters.
Interested in escaping the burden of financial worries? Don’t miss this investment and read our other articles on tips for real estate investment.