With today’s uncertain economy, if you were to pick a superior investment for small business owners, the best answer would be real estate. This is due to the consistent potential for growth of valuation overtime and the offer of a relatively stable, passive income.
Many investors understand the incredible upside that real estate investments offer in terms of creating long term generational wealth. Real estate can be a long term investment, that will bear higher returns than most other forms of investments. So, take this time to read the following reasons why you should take advantage of an opportunity to invest in real estate:
Predictable Cash Flow
As opposed to stock investments where cash can be tied up until the sale, real estate, particularly, rental properties offer a way to create continuous cash flow. Cash flow can be received from the profits you make every month by renting out your property after you have paid all operating expenses and mortgage payments. A good investment offers 6% or greater cash flow. What makes cash flow beneficial, is that it increases in the long run without running the risk of reducing your principal investment.
Property Can Be Leverage
With real estate, you’ll have better control over your investments because it is a tangible asset that can be leveraged. What do you mean by leverage? Leverage is when you borrow capital to increase the potential return of an investment. This usually happens when a mortgage is used to decrease the amount of investor capital needed to buy a property. And then, when the property value rises, so does the equity. Once you have enough equity, you can leverage the equity to buy other properties.
Various tax codes allow deductions for the operating expenses in real estate ownership. This includes deductions on mortgage interest, property taxes, cash flow from rental properties, among other things. The tax deductions also help with offsetting your income and reducing your overall taxes.
Capital Appreciation in the Long Run
The value of a property will increase over time, and this is often called, appreciation. For years or even decades, it is proven that the more you hold onto your property, the more profit you will make. This will vary depend on the strength of the housing market as well. Various factors should also be taken into consideration, such as supply and demand, interest rates, location, and others. You just need to make the right decisions when it comes to your real estate investments. You should base your purchases and investments, specifically on the goals you’d like to achieve with the investment. One way to ensure this is achieved is by working with an expert, who understands the market as well as how to achieve the goals that you would expect.
Land as an Investment Property
We all are all familiar with residential, commercial, or rental properties. But how about the land itself? Well, it might be unfamiliar to you. But, one of the best ways you can invest in real estate is with land. For small investors, they can develop the land into whatever property they want. It can also be a low-cost investment, and it requires little to no maintenance. It can provide you with a great potential for return on investment since there is less competition. It is a huge opportunity for you as a small business owner if you want to start investing in real estate.
It can be seen from the following reasons how much of an advantage it is to own a property and use it as an investment. At Virtuoso Realty Group, we can help you navigate the best opportunities for your real estate investments and get your desired results. We bring expertise from the real estate industry as well as experience from consulting and running our own businesses. We offer every client a unique experience tailored to their own individual goals and desires.
October 23, 2020
October 19, 2020
October 17, 2020
October 14, 2020
October 12, 2020