Angel Investors8 Major Reasons Why You Should Invest In Real...

8 Major Reasons Why You Should Invest In Real Estate Starting Today – Yahoo Finance


- Advertisment -spot_img

Investing in real estate isn’t just for the rich and famous. Anyone can do it, even if you only have a small down payment. With the right preparation and research, anyone can enjoy the profits real estate offers.
Who Should Invest In Real Estate?
You don’t have to be a specific type of person or have a particular financial status to invest in real estate. If you desire to grow your portfolio, diversify your investments, and enjoy cash flow and capital gains, you should invest in real estate.
So who should invest in it?
Investors Looking to Diversify
If you’re already invested in the stock market or other risky assets but want to diversify, branching out into real estate is a great solution. If you invest some money in stocks and additional money in real estate, you’ll lessen the blow if one industry tanks. If you have all your money in the stock market, for example, and it crashes like we’ve seen occur multiple times, you could lose everything. But if you have money diversified in real estate, you may not lose everything and could even offset the loss of capital gains.
Anyone Looking to Start Investing
If you haven’t invented it yet, real estate is a great place to start. You can even ‘house hack,’ buy a multi-unit property, live in one unit, and rent out the rest. This allows anyone, even beginners, to start investing in real estate.
Investors Looking for Cash Flow
Most investments don’t provide cash flow. You invest your money and leave it, not accessing it until you sell the asset, such as stocks. If you invest in buy and hold real estate, you earn cash flow monthly when you have tenants paying rent. The difference between the amount collected and your expenses is your cash flow. You can use it to cover your monthly bills, save for the future, or even create a more extensive real estate portfolio.
8 Reasons to Invest In Real Estate
Now let's look at the top 8 reasons to invest in real estate to help you decide if it’s right for you.
1. It’s a Tangible Asset
When you invest in intangible assets, like stocks or bonds, all you have to show for your investment is a piece of paper. You don’t have ownership of anything. If the stock market crashes, your piece of paper could be worth next to nothing.
If you invest in real estate, you have a tangible asset. Values may increase and decrease throughout the years – there’s no guarantee they will not fall, but tangible assets are worth something. You still have a piece of property to sell should you need to get out of the investment.
Since it’s a tangible asset, it takes a little longer to sell it since you need to work out a deal with a buyer and go through all the legalities. Still, in the end, you’ll walk away with your initial investment and hopefully a capital gain if all goes according to plan.
2. Real Estate Values Usually Appreciate
If you invest in a home for long enough, chances are it will appreciate. While things happen, like the housing crisis of 2008, they aren’t common. Most of the time, buildings and land appreciates, making your investment worth more than you paid for it.
You can also force appreciation by renovating or improving the property. Whether you buy an undervalued property and fix it up to sell, or you renovate a rental property, you can increase the home’s value faster than natural appreciation occurs, giving you an even greater return on your investment.
3. You Can Leverage Your Equity
As you pay your mortgage balance down and/or renovate the property to increase its value, you can leverage the equity to further your investments. The equity in your property is the difference between your home’s value and the amount you owe on your mortgage. Any difference is your profit.
If you keep the home, you can’t use all of the equity, but you may be able to take out up to 80% of the home’s value, using what’s left to invest in more real estate. This is a great way to increase your portfolio without waiting until you have enough money saved for a 20% – 30% down payment for another home.
4. Real Estate Provides Cash Flow
If you invest in a buy-and-hold property, you can rent it out and earn monthly cash flow. Most investments don’t provide cash flow. At the very least, they may provide dividends, but you only receive them quarterly or sometimes annually.
Depending on how you manage your property, real estate can be a passive investment. If you work with a platform like Roofstock Marketplace to buy your investment property, they can match you up with a property management company. This is important if you invest in long-distance real estate. This means you don’t have to do much work and yet enjoy the monthly passive income and the capital gains when you sell the property.
5. You May Be Eligible for Tax Deductions
When you own investment real estate that you live in, you get very few deductions. Most homeowners don’t itemize their deductions, so they can’t take advantage of real estate savings. Even if you itemize, you can only deduct your property taxes and mortgage interest in most cases.
When you buy and hold real estate, renting it out, you own a business rather than just an investment. The IRS allows you to take many deductions just like you would if you owned a brick-and-mortar store.
Any expenses you incur to maintain the property, handle business, or even conduct business (buying a laptop, traveling to the property, etc.) can be written off on your taxes. This reduces your tax liability and increases your profits.
6. It’s a Great Retirement Savings Plan
When you invest in real estate, it’s not liquid. You invest in it for the long term. As time passes, you earn more equity in the home. When you’re in retirement or near it, you can sell the property and use the profits to get you through retirement.
Many call it a forced retirement plan. You aren’t putting money away in a 401K or IRA, but you pay the mortgage every month. If you rent the property out, your rent should cover the rent and other expenses incurred, which means you invest in your retirement without contributing money each month.
Talk with your tax advisor before you sell the property, though, so you can minimize your tax liabilities when you sell the home. Since it’s not a principal residence, you don’t get the capital gains exclusions, but there are other ways to reduce your tax liability.
7. You Have Many Options
There’s more than one way to invest in real estate. Many people buy and hold real estate, as it provides a nice monthly cash flow and can help you save for future goals. If you use a platform like Roofstock Marketplace, they provide you with all the information you need to choose a property, including the financial information.
If you are a fixer-upper type person, you may enjoy fixing and flipping. This involves finding undervalued properties, rehabbing them, and selling them. This usually happens within six months, so you don’t have a lot of carrying costs. You can then turn around and buy another property, doing it as many times as you want until you reach your earnings goal.
8. You Don’t Need a Lot of Money to Invest In Real Estate
Many people assume they need a ton of money to buy investment real estate. You don’t. When you find the right property with the help of a platform like Roofstock Marketplace, you’ll have an easy time getting financing if you have decent credit and have your debts under control.
When you can get traditional financing, you need only 20% – 30% of the sales price to put down on the home. This means you can leverage your investment – investing in an asset worth much more than you invested. If the property value increases, you earn an even larger return on your investment.
How to Invest In Real Estate
There are many ways to invest in real estate. The right method is the one that you are most comfortable with, and that provides the information you need to make a solid investment choice.
Work With a Real Estate Agent
Most people work with a real estate agent to buy a house. While this works great for primary residences, not all real estate agents, work with investors. If you go this route, interview several agents to determine who offers the service you need.
Real estate agents have access to the MLS listings to help you find the properties for sale. Still, when you’re investing, you need the property to be affordable, in a highly sought-after area for renters, and in an area that generally appreciates.
If you find a real estate agent who understands your needs as an investor, you can use them to help you find a home.
Use a Real Estate Platform
If you’d rather look for homes yourself but want support, the Roofstock Marketplace platform is a great option. Roofstock sells homes by investors to investors. Many of the homes listed already have tenants in them. When you buy the property, you buy it with the tenants and active lease, making you a landlord on day one.
Not only does Roofstock have a great selection of properties for sale for investment purposes, but they do all the legwork for you. They provide all information about the property, including cash on cash return, net operating income, cap rate, and gross yield. This helps you make a financially sound investment decision, given your situation and goals.
Work With a Real Estate Wholesaler,
A real estate wholesaler is a middle-man. The wholesaler finds properties for sale, typically undervalued properties, and puts them under contract. The wholesaler then transfers the contract to you at a slightly higher price. The price difference is the wholesaler’s fee for finding the property and doing the legwork.
This works great for fix and flip properties, or if you don’t mind buying a property and fixing it up before you rent it out. Before you buy a property, make sure you understand its financials and the demand for rentals in the area to ensure you’re making a good investment.
You can also buy investment properties yourself. You don’t have to use any professionals to support you, although it’s recommended. If you like the thrill of finding properties, bidding on them, and crunching the numbers to see if it works, you aren’t required to use anyone to support you until you get to the closing process. We recommend using an attorney, appraiser, and inspector to ensure you’re making a good investment.
Roofstock Marketplace is a good compromise between hiring a real estate agent and doing it yourself if this seems too overwhelming. It costs buyers only 0.5% of the sales price if they buy a property, and Roofstock does all the legwork for you while allowing you to view the properties and decide for yourself what’s right.
See also: Get Started in Real Estate Investing
The Bottom Line
If you haven’t invested in real estate, now is a great time. There are plenty of opportunities for investors to buy a property and help the community by providing rentals. As the world picks up the pieces from the pandemic, millions of people are turning to rentals either because they couldn’t afford their mortgage any longer or they’ve picked up and moved to a new state for a fresh start.
If you have the money for a downpayment and the credentials to secure a mortgage, you can leverage your investment and enjoy the profits real estate offers.
Image by ErikaWittlieb from Pixabay
See more from Benzinga
Click here for options trades from Benzinga
First Look At New Alternative Real Estate Investment Offerings: Minimum With 6%-10% Returns
Stock Wars: KB Home Vs. LGI Homes
© 2021 Benzinga does not provide investment advice. All rights reserved.
Inflation is at a 31-year high. But these Mad Money megatrends could help you fight back.
Shares of Paysafe (NYSE: PSFE) plunged on Thursday after the payments platform issued a forecast for sales and profit that fell well short of investors' expectations. As of 2:15 p.m. EST, Paysafe's stock price was down more than 40%. Paysafe's revenue declined by 1% year over year to $353.6 million.
(Bloomberg) — Elon Musk doesn’t exactly sound optimistic about the prospects of Rivian Automotive Inc., even after the rival electric-vehicle maker’s blockbuster IP0.Most Read from BloombergWhy Hong Kong Is Building Apartments the Size of Parking SpacesFarmers Take on ‘Post-Apocalyptic’ Food CrisisGreece’s Popular Islands Are Crowded — With PlasticDo Prisons Deserve a Second Chance?Tesla Inc.’s chief executive officer said he hopes Rivian can boost production rates and get cash flow to break-ev
Rivian's debut in the public markets has investors buying up shares of other EV sector start-ups.
The IRS makes inflation adjustments yearly, but this year they coincided with hot October inflation data
Three of last year's hottest stocks are trading 49% to 57% off their recent highs. Let's go shopping.
Negative headlines have come in rapid fire for the company in recent weeks—and it dramatically missed sales estimates for the third quarter.
The CEO of the electric vehicle pioneer detailed his sales to the Securities and Exchange Commission. He exercised 2.2 million options, sold some to pay income tax, and then sold 3.6 million more shares.
For most of the past two years, all the focus has been on the coronavirus, but these biotechs have big plans to develop inoculations against other diseases, too.
Shares of several related stocks are ripping higher today, suggesting that investors are feeling especially bullish on the prospects of the EV industry. Nio (NYSE: NIO) is up 6.1%. Fisker (NYSE: FSR) is up 15.9%.
CNBC's "Fast Money Halftime Report" panel focused on lithium stocks Thursday as they selected their top picks for 2022. Market Rebellion co-founder Jon Najarian named QuantumScape Corp (NYSE: QS) his top stock for 2022. "You just can't have enough lithium right now," Najarian said. He noted that there are other viable stocks to buy in the lithium recycling space, but reaffirmed that QuantumScape is his top pick. See Also: Quantumscape Insider Sold Over .8M In Company Stock Requisite Capital Mana
Another electric startup, Rivian, has roared into the market with no sales but a higher valuation than Ford and GM.
Share prices of Advanced Micro Devices (NASDAQ: AMD) jumped 10% on Monday, Nov. 8, after the chipmaker announced that Facebook parent Meta Platforms (NASDAQ: FB) has adopted its EPYC server CPUs (central processing units). AMD stock closed the day at an all-time high as investors cheered the news, which isn't surprising as the new business could significantly boost the chipmaker's growth in the long run. Let's see why the adoption of AMD's server chips by Meta is going to be a big deal.
Every stock has a backstory, and the backstories offer hints and clues to what lies ahead. A smart investor will learn which clues or signals bode best for the stock. These are the ones to follow. One sound signal is insider buying. These insiders are corporate officers; they hold positions of high trust and responsibility in their companies, with accountability to shareholders and Boards for company success and profits – and they have deep knowledge of the company’s inner workings and plans. In
If we want to find a stock that could multiply over the long term, what are the underlying trends we should look for…
Virgin Galactic (NYSE: SPCE) shares fell earthward on Thursday, dropping by nearly 5% across the trading day. This was on the back of a string of analyst downgrades of the space-tourism company's stock following Q3 results that were unveiled at the beginning of the week. Several analysts were quick to modify their views on Virgin Galactic stock after those results were published.
Riot Blockchain Inc. (NASDAQ: RIOT) shares traded higher Thursday after the cryptocurrency mining stock is likely moving higher as Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) are both making gains today. Investors Business Daily also added the stock to its watchlist. Riot Blockchain closed up 8.3% at $39.53. Riot Blockchain Daily Chart Analysis The stock has been pushing higher and now has reached resistance in what technical traders call an ascending triangle pattern. The $40 price level i
In this article, we discuss the best cheap stocks to buy in Warren Buffett’s 13F portfolio. You can skip our detailed analysis of the billionaire’s hedge fund, and go directly to read Berkshire Hathaway Stock Portfolio: 5 Cheapest Stocks. Warren Buffett is currently serving as the chairman and CEO of his hedge fund, Berkshire Hathaway. […]
Shares of solar energy stocks jumped almost across the board on Thursday as the industry got some good news about potential tariffs. Asian solar panel manufacturers led the way, but everyone from residential solar installers to adjacent equipment manufacturers experienced at least a small bounce. At their peaks Thursday, Canadian Solar (NASDAQ: CSIQ) was up 15.6%, Daqo New Energy (NYSE: DQ) gained 10.3%, JinkoSolar (NYSE: JKS) was up 11.9%, and Enphase Energy (NASDAQ: ENPH) popped by 8.9%.
Sundial Growers Inc. (NASDAQ: SNDL) ("Sundial" or the "Company") reported its financial and operational results for the third quarter ended September 30, 2021. All financial information in this press release is reported in millions of Canadian dollars and represents results from continuing operations, unless otherwise indicated.



Please enter your comment!
Please enter your name here

Latest news

Engineer Turns Entrepreneur After Fully Online MBA – BusinessBecause

Please try again or another word Register or Login Partner Sites Login/Register Experienced engineer Matti Jokinen...

Fake money, real experience: Dal students profit from pretend hedge fund – The Signal

Dalhousie Investment Society 'doesn’t get the attention it deserves,' says professor By Ryan Bellefontaine December 1, 2021, 8:00 am ASTLast Updated:...

5 Stocks I Expect Will Make Me Wildly Rich by Retirement – Motley Fool

Returns as of 12/01/2021Returns as of 12/01/2021Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps...

This Entrepreneur Proved That Startups Can Reinvent Themselves When Necessary – Forbes

Chris Riley, Co-founder of USA RxStarting a business isn't easy, and the odds of success are always against you....
- Advertisement -spot_imgspot_img

How Young People Can Get Started in Real Estate Investing – Motley Fool

Returns as of 11/30/2021Returns as of 11/30/2021Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps...

Unify Platform AG Launches New Feature on UNIPLAT: Credit Rating of Researchers and Entrepreneurs – Yahoo Finance

- Credit Rating Helps Researchers and Entrepreneurs to Visualize Their Credibility -YOKOHAMA, Japan, Nov. 30, 2021 /PRNewswire/ -- Unify...

Must read

- Advertisement -spot_imgspot_img

You might also likeRELATED
Recommended to you