Investing in Real Estate 101
Why is investing in real estate beneficial?
Real estate values will always increase over time.
Hey, it's just the facts. As you hang onto your real estate investments, their value will increase over time. Even when the market slips, it always recovers, and values then continue appreciating. Unlike some stock market investments, where there are numerous factors beyond your control that can negatively impact your investment.
Diversify your portfolio to save for education and retirement costs.
All financial planners recommend you diversify your portfolio and investing in real estate is a great way to do that! This helps mitigate risk as you're saving up money and accumulating wealth to help with education expenses for children and/or retirement costs later on in life.
Investing in real estate comes with numerous tax benefits.
And, of course, investing in real estate offers some serious tax benefits to include tax deductions on mortgage interest, cash flow from investment properties, operating expenses and costs, property taxes, and more.
How can I invest in real estate?
Take out a home equity loan to pay for the down payment on an investment property.
If you currently own a home, you may want to consider taking out a home equity loan to provide the money for a down payment on an investment property. Just keep in mind there are typical requirements when it comes to how much equity you have in your home, your credit score, and your debt-to-income ratio.
Consider setting up a legal entity to hold your investments through.
To mitigate risk, you may want to consider setting up a legal entity like a limited liability company or limited partnership to hold your real estate investments through. This will protect your personal assets in the (unfortunate) case that a law suit arises.
Consider which form of real estate investment you want to get involved with.
There are several ways you can get involved in real estate investing, like rental properties, flipping houses, Real Estate Investment Trusts (REITs), etc. Most of our clients stick with purchasing rental properties and house flipping.
We can help you identify properties that would be good investments for you based on comparable rental rates and comparable property values in the area.