Top 5 Reasons Why Investing in Real Estate Is an Excellent Idea

Top 5 Reasons Why Investing in Real Estate Is an Excellent Idea

If you are looking to grow your money and begin building wealth, investing is one of the best ways to go about it. There are several different assets you can ultimately invest in, but some are going to be more profitable than others. 

In fact, according to a new Gallup survey, investors are now setting their sights on real estate and the benefits of investing in real estate rather than other assets like stocks. Of the participants surveyed, 35% said real estate is the best investment, with only 21% saying stocks. 

Keep reading to learn why you should consider investing in real estate and how you can make money at it.

1. Tax Benefits

One of the most significant advantages of investing in real estate is the incredible tax benefits that come along with it. A few of the benefits include:

  • Deduct expenses
  • Capital gains tax rather than income tax
  • Pass-through deduction

Any expense that's directly associated with the real estate investment. The ability to deduct expenses, such as property taxes, insurance, and interest, is a major benefit for investors. Some of the best advice to invest in real estate is to learn the ins and outs of real estate investing tax strategies to maximize your returns. 

2. Passive Income Stream

Most people have a dream of creating a passive income stream that can turn into something bigger. By investing in real estate, you can do just that. 

You may be wondering how to invest in real estate and still earn a passive income because you will often have to deal with tenants. The secret to earning passive income is to use property management services. This way, the management team will take care of all the rental property needs, giving you time to grow your business. 

For example, if you live in Baltimore, you would look for a local property management company to control the rental properties and manage the day-to-day operations. 

3. High Leverage

Another one of the most significant benefits of investing in real estate is the ability to leverage your investment. Leverage is the ability to use borrowed money to increase your position's size and potential returns. 

When it comes to real estate, you generally only need a fraction of the capital upfront to purchase the home. For example, if the rental property is for sale for $150,000, you could purchase a down payment on the house for around $15,000 or 10% of the asking price. 

According to information from Bank of America, the required down payment will often depend on a range of factors, like what program you are using. Most loan programs will require anywhere from 5% to 20%.

Get Started Investing in Real Estate Today

Getting started investing in real estate is not as hard as it may seem. To start, you will need to save up as much money as possible and begin to learn the best ways to invest in real estate. The better you know the area, the easier it will be to market it and find tenants. 

If you are thinking about becoming a real estate investor in Baltimore, contact us today, and ask how we can help!

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