The word is everywhere. Invest. Invest. Invest. It almost seems to be the ‘sexy’ word of the year. But what exactly does it even mean? How do you go about doing it? There are so many avenues you can take when it comes to investing that it is easy to stop before you can even start. It is a choice overload at its finest. Some avenues of investing, however, are not as complicated as, say, stocks or bonds. Real estate is a perfect example of this. Investing in real estate may seem daunting at first, but with a little research and with baby steps, it is a course of action that is well worth the effort. Here are a few reasons why investing in real estate is the way to go.
‘Passive income’ just sounds good, doesn’t it? Whether you decide to pursue short-term or long-term rental properties, either option will provide you with a passive source of income each month. Of course, as with anything, some work will have to be put into the investment, especially in the beginning. For example, it will take time to find a property you want, go through the buying process and then find a tenant. Once that happens, however, there is very minimal work you have to do after that. It’s not like working a nine-to-five job where you only get paid for those forty hours and that’s it. Essentially, you can earn money in your sleep.
It’s 2022. Money is a major source of stress for almost everyone, that’s no secret, but real estate is an almost surefire way to work your way toward financial independence. As mentioned, yes, it may feel daunting at first to break out of your normal routine and try something that a lot of people around you probably aren’t doing. If you bank on yourself, though, and work smarter, not harder, financial independence through real estate is one step closer.
As with any investment (and anything in life worth having, really), there is, of course, some risk that is involved. The market goes up and down based on a myriad of different societal and worldwide happenings. People will always need a place to live, however. That is a fact, and the value of houses tends to lean toward a trajectory of steadily increasing over the years. So, the reliability will also be with you, if you play the long game. Even if the value of your house goes down due to unforeseen circumstances, the value of real estate has always been able to climb its way back up. So, if you want to retire at some point, you can still collect that passive income while you wait until the market increases to a point at which you feel comfortable enough to sell.
Whether you own one property, or twenty, owning property comes with multiple different tax deductions and benefits. Writing off expenses is a big one. Things such as property management fees, property taxes, maintenance costs, mortgage interest and even utilities can be used as deductibles come tax season. Another tax benefit fun fact is your home office! The area used to create a space in your home just for work can also be deducted!
Increase Your Assets
In general, the rule of thumb for assets is that you want more assets than you have liabilities. In regard to business ventures such as real estate, the more you can increase your assets, the better your company looks and the more financially secure you will become. Even if your ‘company’ consists of just two investment properties, and you’re still working full-time doing something else, that is still a giant feat and an excellent way to increase your assets.
Whether you’re new to the investment game, or simply want to try your hand at a different type of investing, real estate is the way to go. Take the plunge. It’ll be worth it.