REAL ESTATE INVESTING
Your Newest Source of Income
Real Estate can be a lucrative source of income, especially when investing in a community with several apartments, townhomes, or units, because tenants are consistently paying a monthly rent or fees to the owners.
When you invest in real estate, you too become an owner, and potentially reap the benefits of another source of income, without taking part in day-to-day operations and management.
The value of real estate generally increases overtime, unlike vehicles or equipment. That means you have the opportunity to depreciate the value of a property, which is an accounting method that permits you to deduct the value of a specific asset over it’s useful life. In real estate terms, you’re able to depreciate the value of a property, which often times allows you to receive income, which is offset by the depreciation, and potentially lessens tax liability through a tax deduction.
When you make a mortgage payment, a portion goes towards the interest on the loan, and another portion goes towards paying the principal value of the property. Every payment adds value to the property.
Once the mortgage period has ended, the property will be paid for, and the rental units will have paid for the bulk of the cost. The more equity you build, the more you can leverage, and acquire additional rental properties, which increases cash flow.
Leveraging allows you to invest without coming up with the full cost. Use leverage in real estate investments by taking out a mortgage to buy a property with only a fraction of the total cost. You can still benefit from the full value of the property – keeping your portion of all the income generated, the appreciation, the equity, and take advantage of potential tax write-offs.
Leveraging is one of the many reasons that attract people to investing in multiple properties and projects in real estate.
Once you invest in real estate, you can begin to generate passive income, which is many times, tax-free, or nearly tax free. You don’t have to worry about managing your investment, let your investment work for you.
Cash Flow for Retirement
Carefully investing in real estate is an excellent way to increase your wealth over time, and provide added income for retirement.
Diversify Your Portfolio by the Benefits of Owning a Physical Asset
Owning a physical asset can provide inflation protection and diversify your portfolio. Regardless of any financial condition, you can monetize your asset through renting the property. Compared to traditional bonds or stocks, diversifying your portfolio with owning physical assets can help protect against asset market swings, and provides more stability during down markets or stock sell-offs.
Hedge Against Inflation
As the value of a property increases, the rental income and the investment’s value will increase as well. Investing in real estate can be a smart and effective hedge against inflation. It provides real estate investors added protection against short-and-long term inflation. A cost of living increase is directly associated with a growth in a property’s cash flow, and the average value of the real estate will usually outpace inflation.
Real Estate Can Be a Stable Investment
While a stock investment can fluctuate on any given day, real estate is typically a stable income producing investment. Real estate offers an ongoing income on a periodic basis and the strategy is to sell the property when the value appreciates.
Real Estate Is Easy to Finance
In most cases, real estate is easy to finance. A potential investor can typically borrow between 50 percent and 75 percent of the acquisition cost at a low rate. Investing in stocks or bonds, on the other hand, are not as simple to use as collateral for financing.
The Value of Real Estate Appreciates
Investing in commercial real estate can be a very attractive option for individuals and institutional investors. Values increase and rental rates increase because of the high demand for the properties and inflating construction costs.
Out-Perform the Returns of Market Investments
Investing in real estate can out-perform typical stock investments because you don’t have to pay the entire amount of the investment. If a buyer wants to invest $10,000 in the stock market, they would have to pay the full amount, but if they want to invest in a real estate project, they can pay a much smaller percentage of capital.
Investing in real estate as an alternative against highly-volatile stock and bond investments can be extremely beneficial, because investing in real estate can help mitigate risk, and offer diversification to better offset exposure of a standard stock or bond investment.
Variety of Opportunities
Opportunities are endless when you invest in real estate. With assistance from United Investment Services, you can invest in senior housing, multi-family properties, commercial buildings, student housing, and Opportunity Zone Qualified investments. Even without extensive experience in real estate investing, you can still begin passively investing while our finance team handles the entire transaction.
Real Estate Will Always Have Value
Rest assured, the value of your real estate investment generally appreciates, and will not become worthless, even during troubling financial times. Even if the value drops, it will never be worth nothing, unlike a stock.
Potential for a High Rate of Return
A major benefit of investing in real estate is the potential for earning a high rate of return. Investing in commercial real estate offers an opportunity to produce return of more than twenty percent, depending on the location and type of property. This can be much more lucrative, compared to bank accounts, dividend-paying stocks, and bonds.