We now live in a time where multiple streams of income is not only highly encouraged but is now considered a necessity to get ahead of the curve, build up a reliable source of emergency funds and to at least have something to fall back on.
Of course, there are multiple investments that one can get into nowadays, especially with the boom in digital marketing schemes and other opportunities presented by digitalization and yet Real Estate Investments remain one of the most sought-after investments in the US today.
Why is Real Estate an excellent Investment option?
The key determinant to a good investment is its ability to provide a steady, continuous yield over time. In retrospect, the ideal investment should not only be a source of passive income, but it should generate profitable returns throughout the years.
This brings us to our next concern. Homes, buildings and other properties do have their challengers such as structural problems, the unpredictability of the market, lack of liquidity, and vacancies.
However, with the right maintenance and management techniques, a Real Estate Property is a solid source of income still.
Here’s why:
Despite the challenges presented by Real Estate Development and Investment, the market is rather manageable. So long as an individual has the right funding, knowledge on Real Estate management and maintenance, they can obtain a higher cash flow and an improved rate of return over time.
More importantly a Real Estate Investment is an inflation hedge. Unlike other investments, the value of any property does not depreciate so long as it is well maintained and managed. In fact, with more Real Estate Developments surrounding a property, the more its value shoots up. On top of that, you have the option to reside in and/or rent out your real estate properties.
Additionally, the rules set regarding renting out or leasing Real Estate are rather flexible and there are multiple platforms wherein you can express such freedom.
Whether it’s a shed, a room, an entire house, a building or a single floor, you can rent it out.
This is what makes Real Estate quite the enticing investment even in 2023. If you aren’t convinced that this is the right choice for you, let us highlight the numerous reasons to invest in Real Estate.
Reasons to Invest in Real Estate
As we’ve mentioned earlier, property values tend to appreciate over time. This gives you an investment that is protected against inflation – of course, given that you have good – paying and long-term tenants. Even with the challenges of vacancies and maintenance fees it is remains a quite viable investment option.
Here’s why:
Less Work, More Money
One of the most commonly practiced method in Real Estate Investment today is the concept of “House Hacking”. This means that an individual can buy a home or residential property for cheap or with a mortgage loan, build up it’s value by adding renovations or repairing some areas of the property making it into a livable single-family or multifamily building.
As it’s initial value shoots up, this allows you to charge rent which is enough or even more than enough to cover the actual mortgage of the property.
House Flipping
House flipping is rather similar to house hacking in the sense that properties are bought at more affordable rates and then renovated or repaired to raise their value.
However, rather than leasing out a property, with House Flipping, investors make a big ‘one-time’ profit by selling out their home.
The key to this mostly lies in finding a good home in an attractive neighborhood. As cheaper homes mostly require repairs, you also need to look into what you can salvage and what needs to be worked on. If you aren’t quite sure about your ability to judge the structural integrity and overall condition of a home, you may need to hire or get someone else to assess the property you’re looking to invest in.
Choosing your Tenants and Buyers
The best thing about investing in Real Estate is the variety of investment options, allowing for more flexibility and security on your end.
Let’s take House Hacking for example. Ideally, it would be much easier to rent out your home or unit to a single family or few families rather than to single individuals. However, in some cases, it may be much harder to find families to rent out to so you can always opt to accept a single individual or group of friends, colleagues, etc as tenants.
Similarly, you can always opt to choose your buyers as well.
Though tight screening process might make it harder for you to find tenants, leasee or buyers it’s always good to note that you do have this freedom when investing in Real Estate.
Tax Breaks and Deductions
One of the more uncommonly discussed benefits of Real Estate Investments are the numerous tax breaks and deductions that you can apply for.
You might be wondering why and how you can avail of these tax breaks when the value of your property could go up over time. Well, here’s how it works.
Buildings themselves depreciate over time. Just like everything else, they will break down over time. However, the land on which your Real Estate properties are built upon will not lose their value.
However, you can claim a deduction on the reasonable costs of owning, operating and managing the property itself. You can even defer capital gains by using a 1031 exchange.
You have the Options to Invest in REITs
If you aren’t ready to manage or purchase your own property, you can put your investments into Real Estate Investments Trusts, otherwise known as REITs.
A REIT refers to a company that owns, operates, or finances income-generating real estate. With it, rather than owning Real Estate properties directly, you own a share of what a company owns.
Though you might not own all of the profit, REITS are obliged to shell out or pay out more 90% or more of their taxable profits to shareholders which is a considerably generous offer still.
Tools You can Use in your Real Estate Investment Journey
Whether you’re looking towards investing in your own Real Estate Property, REITs or signing up for a housing loan, you need to have a rather professional image.
This means you not only look the part but that you play the part too with the way you dress, present yourself and the tools that you use.
Real Estate Investors presumably deal with numerous documents and formalities when dealing with the purchasing, leasing and managing of their properties on a day to day basis. While it might not seem like a daunting tasks to do – formulating emails, creating leatherhead templates, business introduction letters, letter of agreement, etc. – with the bulk of paper work you need to handle from the get-go it can become quite tedious work.
That is what we at JHL aim to help you with. Rather than dealing with the nitty gritty of template creation, you can opt to choose from our wide variety of template options to help smoothen out your business transactions and free up more time on your hands to handle the things you actually need to do on your own.
What do we offer?
Well, here are a few of the templates that you can use for your Real Estate Investments:
Can’t find what you need here?
Well, we do offer a ton of materials for small business on our website. Feel free to visit and checkout our books and other resources to build your business even further. Or Give us a call to talk to our experts at 1-800-783-6980
