Many people love real estate investing because it is one of the most enduring investments that you can always rely on. However, some people still wonder why many people love investing in properties even after the 2008-2009 crisis that rocked the real estate market in the country. The good thing about real estate is that once you buy your property and get tenants, you will enjoy steady income for the rest of your lifetime. Alternatively, if you buy property today and keep it for some years, selling it will be more profitable than investing in stocks or keeping that money in a bank so that it can generate some interest. If you are looking for a long-term wealth, then investing in real estate is what you need. The following are basic reasons why many people love real estate investing and why it is beneficial to long-term wealth.
Real estate keeps on appreciating
Real estate keeps on appreciating but your income will stop growing after some time and eventually stop if you rely on salary. Therefore, it will be difficult for you to pay $3000 rent in the years to come for an apartment that you are paying $1000 today. However, when you buy your house today, its value will have appreciated in future and renting it will bring you more income. Selling your property in future will also get you good profit.
You enjoy tax benefits
According to the U.S. government, real estate is deemed part of the American dream. Consequently, property investors enjoy numerous tax benefits, unlike investors of other assets. Some of these benefits include mortgage interest deduction, an exchange program to defer taxes, $250000 tax-free gain for single investors and $500000 tax-free gain for married couples when they invest in real estate among others.
Real estate is much easier to understand and manage
If you are looking for a long-term source of wealth that is easy to understand and manage, then real estate tops that list. Once you have acquired your property in a good location, you have good tenants and hired a reliable property manager, then real estate becomes the best business to operate. If you own several properties in good locations, you are assured of a steady source of income for the rest of your life.
Less temptation to sell out too soon
Selling a property is not as easy as selling a stock when a market is crashing. The good thing with investing in real estate is that you do not feel like losing your property once you buy. Real estate investors are more patient to wait for the market to stabilize, unlike investors of other assets such as stock. As a result, property owners end up keeping their investments for a longer time and enjoy more returns in future.
Enjoy fixed rate mortgages
The good thing about investing in real estate is that you can get a fixed rate mortgage to finance your property. In this case, your mortgage will never change even 10 years from today and your property keeps on appreciating. As a result, your mortgage liability becomes a smaller part of your overall net worth. That way, you end up being wealthier in future after completing paying your mortgage.
Real estate is a passive income machine
Although many people may argue that managing real estate is hectic when it comes to running after tenants, there is no doubt that rental income is among the best sources of passive income. If you do not want to manage the property yourself, you can hire a property manager to take care of the property on your behalf. That way, you save yourself from property management stresses and wait for your returns to be deposited in your account.
Real estate is the best asset to pass to your heirs
Everybody would like their children and grandchildren to have a better life without having to struggle to make ends meet. No one would like to live like a king today and have his or her children as beggars in future. Real estate investment is a steady source of wealth that you can pass to your heirs. We have heard of some family properties that were bought for less than $20000 several decades back and today they are worth hundreds of thousands or even million dollars. Therefore, investing in real estate not only assures you long-term wealth but also serves as a source of income to your heirs.