Real estate investment is one of the most popular business strategies to realize additional income. Done with care, planning and foresight, real estate investments can yield huge returns that are not normally achievable through other types of investments.
The real estate market is not governed by the same parameters and variables of the stock market. The correct pricing mechanism is a decision that is mostly left between the buyer and the seller. This is the very reason real estate investment offers a great opportunity for investors who possess a sharp eye and skill for good deals and remarkable negotiation skills.
Real estate markets are generally insulated local markets. The drop in home values in one location does not generally affect property values in another location. If you can have a geographically diversified real estate holdings, the more protected your investment is against localized and temporary deflation of property values.
You can generally borrow money to buy real estate but you can not borrow money to buy shares of stocks. Unlike the stock market, you can control a large dollar value of real estate with only a small amount of your own money and by using loans and mortgages.
The real estate market is more stable and less subject to volatility.
The tax advantages of real estate holdings are fantastic! Factoring in depreciation for almost 30 years as a deductible (27.5 years to be exact) after deducting interest payments during the loan term basically gives real estate owners a generation’s worth of additional tax breaks!
Investor controlled value adjustment is another advantage of real estate investment. As an investor, you can choose to increase the built-in value of your property by adding modifications/improvements which is not the case for other types of investment. In the case of your home, you can do this simply by adding a swimming pool, a patio, a garage, renovating the kitchen, etc.
Best of all, you can purchase a property for 60 to 70 percent of it’s market value while at the same time benefit from the national appreciation average of 5% increase of property values.
With proper planning and research, real estate is one of the most profitable investments you could make. Keep yourself up to date with the market conditions and developments; as soon as you find a good deal, go ahead and jump in.