Why Real Estate Investment? Top 5 Reasons:
1) Tax Advantages
Tax Advantages – Income from Real Estate Investment provides the ability to make money at lower effective tax rates through the use of depreciation and loopholes that a regular employee does not have access to. If I’m working at a lower tax rate it’s the same as getting a raise for working the same amount of hours. Work smarter, not harder! Verify this with your own tax adviser as everyone’s tax situation is different.
2) Diversify Your Portfolio
Diversify Your Portfolio – “Don’t put all your eggs in one basket.” Our economy is still recovering from the last round of damage caused by Wall Street. From Gordon Gekko to Bernie Sanders to The Wolf of Wall Street, Main Street has continued to cry foul and yet bonuses are as big as ever, even after the taxpayers bailed out the banks. Take some of your money and diversify it into assets that are not managed by bankers. Mutual funds don’t get paid to advise you to put money into a single family home close by and flip it or rent it out, so they’re never going to mention real estate investment to you.
3) More Control Over Your Asset
More Control Over Your Asset – Real Estate allows you to be your own property manager or pick one you trust. You choose which property you want, which lender to use, which contractor will fix it up, where the rehab materials will be bought from, what the finished product will look like, how to screen the tenants and who the tenants will be, how much cash flow you will make, and on and on. This beats a CEO with his own personal corporate jet bought by shareholders’ money any day.
4) Forced Appreciation
Forced Appreciation – When you buy $100k worth of stock, the only thing you might be able to do to personally raise the stock price is write the company’s board a letter telling them to work harder and hope for the best. When you buy a $100k house, what’s that worth? Maybe it’s $100k or maybe you know that you can add a pool and a garage and turn $100k into $200k. The point is that you can dramatically raise the property’s value through rehab and upgrades by using your own knowledge and relying on your team of experts.