Real Estate Offers Tax Advantages

Category: Finance, Real Estate.

Why is real estate investing the best wealth builder in the universe?

I can assure you that, in the next 20 years, your real estate property will probably double, perhaps even quadruple, triple in value. The answer is simple: Everyone needs a place to live, and their values usually go up over time. If you are in a hot market, it might even go up 10 to 20 times. Yesterday. When is the time to get into real estate investing? Real estate increases its value to build wealth, but there are other reasons why property investing, compared with any other investing, is the best.

Real estate increases your net worth. Here are five advantages of investing in real estate, the best wealth builder in the universe, as it leads to wealth for you. One of real estate s biggest advantages is how it can increase your net worth instantly because you can buy property below market value. You borrowed all of the money to make this happen. For example, if you find a property that is worth$ 500, 000 and a motivated seller who is willing to let it go for$ 300, you put it, 000 under contract for$ 300, 000 then borrow all$ 300, close the deal, 000, and become the owner of this property. You did not use your own. Your net worth just went up$ 200, 00 Real estate generates income from holding properties.

The minute you own this property, your bank and your financial statement say you have an asset worth$ 500, 000 and a$ 300, 000 loan against it. Rental property( a house, or an apartment, commercial property building) is unique because your tenants pay off your debt on that real estate. With real estate, you can pay less than what the property is worth. If you own rental property with$ 500 monthly mortgage payments and$ 800 monthly rental income, you may earn a lot more. By looking for deals, you can buy real estate that is priced at 20 to 50 percent of what it it is worth. Can you find stock that is worth$ 100 and pay$ 70 for it?

This means you seek$ 100, 000 properties that you can buy for, say, $70, 00 Compare that with the stock market. No. You cannot buy stocks below market value like you can real estate. You pay$ 70, the market value, then pray it goes up to$ 10It could hold at$ 70 for a year, or it could, then go up go down because that s the nature of the stock market. Real estate offers tax advantages. If you have a traditional job with a traditional paycheck, you are entitled to very few tax write- offs or deductions. The third big advantage of real estate investing is how it affects your tax obligations.

However, in real estate or any business you own, you can write off a wide array of expenses, including phone calls and a portion of your business meals. You do not need cash or credit to get into real estate. Owning real estate provides the opportunity to write off most of your mortgage interest and property depreciation. In the stock market, you require most or all of your cash up front to purchase stocks. Some banks or brokerage houses will lend you half of the money to buy stock, but you will still have to come up with the other half. If you want to buy a$ 100 stock, you have to pay$ 100 cash. During my first several years of real estate investing, I knew of only one way to make money in real estate- buying and holding.

Then I learned about flipping, referring contractors and, lease optioning legal services, and so on. That is, buying and renting property, and collecting rents. I started getting little checks, then medium- sized checks, and finally big checks. All you have to decide is how many checks you want from how many sources. You can do the same. Open your mind to not only one, or three avenues, two of income, but to multiple avenues of real estate income. Start with one way and, as your career progresses, you will want to add more.

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