There are infinite perks of investing in real estate. With excellent capital one can enjoy attractive cash flow, finest return, tax benefit and diversification and its possible to assort real estate to build wealth.
If you are planning to invest in real estate, here are right and relevant reasons for you and most importantly why it is always considered a good and long term investment.
We at Geetanjali Homestate firmly believe that investing in real estate is an awesome way to earn a passive income, save for retirement, and build a miscellaneous investment briefcase. Our experience says real estate investment is the best form of investment because you get to use other people’s money (a renter or tenant) to pay off your initial investment while simultaneously increasing your monthly cash flow, and we know this sounds really great.
If you are thinking of investment in real estate and not able to find the right and fruitful fit for you, here we are with the top ten reasons, why investing in real estate is the long term benefit solution.
Passive Income For Lifetime
The most fruitful reason to invest in real estate is to develop a passive income for yourself so that you can enjoy more of the things you dream off. However, not all real estate The Power of Deep Roots Investments are created equal. Maybe you are indecisive to invest in real estate because you’re not looking for another full-time or part-time liability. Maybe the thought of keeping and retaining an investment property on the other side of the country sounds horrifying and difficult to do with your already busy schedule.
This is why Geetanjali Homstate has made the process easy for business men, diligent professionals and all other categories of investors who already have a full plate. We make the investment process smooth and simple by choosing only the best revenue-producing properties in Delhi NCR. Our different path enables you to invest your hard-earned money in real estate markets that have seen continuous and stable growth, and will give you continuous passive income for life.
Diversification Leads to Increased Stability
Many investors aim to decrease the overall risk of their portfolio through allocating funds to various types of belongings and securities. A good investment advisor will tell you the cornerstone factor of investment, risk reduction is asset class diversification (or in layman language, not putting all your eggs in one basket). This deviation of assets helps to ensure that a segment of your investment case is performing well at all times, increasing the overall value of your case at any given point in a seesaw economic cycle.
Adding investment real estate to your case will help offset the volatility of other high-risk assets, thereby decreasing the overall risk level of your case, and providing you with constant returns.
Market Cycles to Your Advantage
Active market timing (buy low/sell high) is a decisive fundamental of fruitful real estate investing. While it is difficult in times when a market has reached the bottom of the real estate cycle, keeping an upward trend in mind and taking action can convert into big future returns.
There are various key clues we use to regulate where a market is in its lifecycle. A number of factors, including seller motivation, supply and demand, interest rates, employment trends and population growth can all have expressive effects on market timing.
Use Leverage to Maximize Returns
Leveraging Your Investment Capital
When you use rented capital to appreciate the earning potential of an investment, you are using the full power of leverage; and since real estate is an appreciable or hard asset, financing is readily available. The potential return on your leveraged real estate investment is extensively increased compared to a non-leveraged investment.
Leveraging Your Time
When you choose to engage in the optional property management solutions offered, you are choosing to leverage your time to your best benefit. You improve from owning a high quality investment, while the day-to-day tasks associated with managing the property are left to the professionals.
Tax Advantages
Real estate investors can take benefit of various tax breaks and deductions that can save money at tax time. In general, you can deduct the feasible costs of owning, operating, and managing a property.
Tax Deferred Growth
Similar to a Registered Retirement Savings Plan (RRSP), the value appreciation of your real estate investment is protected from tax until you sell the property. For occurence, if you purchase property that increases in value, some capital gain is sheltered from tax until you sell. When you own multiple properties, this gains compounds, since there is no limit to how much growth you can shelter with real estate investments.
Tax Breaks
When you sell your property and thereby generate a capital gain, you will benefit from the capital gains status of this profit. This means 50% of your capital gain is taxed at your marginal tax rate, while 50% of the gain is tax-free! This 50% tax-free profit can quickly add up when you own multiple real estate investment properties.
Tax Deductions
Real estate investing allows for numerous tax deductions. The cost of financing and operating your property can be deducted from the income you earn. This includes mortgage interest, property taxes, property management fees (if applicable), repairs, maintenance, and other related expenses that can be deducted from your gross rental income, thus minimizing the amount of tax you will pay.
*The specific tax benefits you will enjoy may vary from other investors, so be sure to consult your tax accountant for specific advice.
Increased Cash Flow
A major gain of real estate investing is its ability to generate income, especially over the long-term as your mortgage is paid down. The income generated from your investment property will often be satisfactory to offset your mortgage payment, taxes, condominium fees and other expenses, while still providing you with increased monthly cash flow.
Your cash flow will be enhanced over time as you pay down your mortgage and funds can then be used to augment your retirement income.
Renewable Source of Capital
Real estate investment also provides you with a renewable source of capital through refinancing options, as property values expand and mortgage financing decreases over time. This reliability can completely offset the potential diminishing capabilities of your RRSP.
Appreciation
Real estate investors make money through rental income, any profits achieved by property-dependent business activity, and appreciation. Real estate values tend to boost over time, and with a good investment, you can turn a profit when it’s time to sell. Rents also tend to increase over time, which can lead to higher return.
