There are many notable benefits to be enjoyed from investing in real estate and owning one’s own home.
Choosing well can bring about everything from a strong and dependable flow of cash to significant tax benefits.
Below are just some of the reasons why investing in a home is always a great idea.
Dependable Cash Flow
Having a dependable cash flow as part of your monthly income makes for a strong financial portfolio. The ability to generate a solid cash flow is one of the main benefits of investing in real estate.
Possibly the best part of owning one’s own home in terms of cash flow, is the fact that making regular mortgage payments ultimately boosts your equity.
There’s lots of money to be saved from investing in real estate – including tax deductions and breaks.
In most countries, the real estate investor can deduct the costs of owning and managing a property from their taxable income, giving their budget a welcome boost. In this way, the property owned really does take care of itself.
The following are expenses that can typically be written off by the real estate owner:
- Bond originator fees paid on the mortgage loan.
- Expenses related to maintenance and up-keep.
- Depreciation (distributed over 27.5 years).
- Real estate-related taxes.
- Homeowners’ insurance.
Increase In Value
The value of a home tends to increase over time. This is referred to as appreciation.
Since the value of real estate appreciates over time, real estate investors can often turn a great profit when it comes to selling. It’s akin to investing the money won from playing the online slots Australia offers and earning massive interest.
As you continue to make regular payments on your mortgage, you will also grow and build your equity.
Your equity is an asset that forms part of your net worth.
Building equity will lead to more financial leverage that can be used to acquire more properties.
When investing in real estate, it’s possible to only put down a fraction of the purchase price while financing the rest.
This means investing only a portion of the value of an asset, but already taking ownership of that asset. As you continue to pay your mortgage, you will effectively increase your ownership share in the asset. This is referred to as leveraging your investment.
There’s nothing quite like the feeling of financial security.
The problem with most investments is that it’s possible to own significant value one minute and lost it all in the blink of an eye.
Real estate investments are different. When owning your own home, you’ll get to rest assured in the fact that you have in your possession a secure and appreciating asset.
For this reason, real estate is also a great way to supplement your retirement income. Most people feel much more secure investing their retirement money in real estate than in a money market account or in the stock market.
It Can Create A Legacy
Since real estate can be passed down to heirs, it can be a way to create and leave a legacy.
And since real estate is an appreciating asset, your legacy will only keep on giving as time goes by.