What Are the Advantages of Becoming a Real Estate Investor?

Tuesday, February 22, 2022

Did you know there are over 29 million real estate investors in the US? It is an industry that is constantly on the rise because of all of the benefits investing in real estate can offer.

Is it the right choice for you? Let us look at some of the reasons why becoming a real estate investor can be highly beneficial.

Real Estate Investor: Steady Income

When you have real estate investments, you create a steady cash flow with monthly rents. This passive income is one of the most important incentives people have to invest in real estate. In areas like Houston, Texas, you can have a return on investment of up to 10.6 percent on a residential rental.

As you pay down the mortgage on the property and build up your equity, the profit will only increase. As your equity increases, you have the leverage to buy more properties for an even bigger cash flow.

Tax Benefits

As a real estate investor, you are eligible for tax breaks and deductions. For most people, this means being able to deduct the costs of owning, managing, and operating a rental property.

Rental income is also not subject to self-employment taxes. The government also offers tax breaks for depreciation, insurance, travel expenses, legal fees, maintenance and repairs, and property taxes. A real estate investor also has the chance of having lower tax rates for their long-term investments.

Inflation Hedge

Real estate is a hedge against inflation. The total inflation rate of the last 20 years has been around 37.4 percent, but home prices have shot up by almost 98 percent in those 20 years.

In many markets, increasing rent annually can ensure you keep the cash flow from the property in line with the annual rate of inflation.

Real Estate Appreciation

Real estate is a long-term investment. You depend on the appreciation of the property over time. Real estate values do rise over time, so you can expect to make a profit when you decide to sell.

Rents also rise over time, increasing your cash flow.

Build a Business

You can build your own business when you turn to real estate investments. It is one of the easiest businesses to get into and you are the person in charge. You have control over all of the investments you make and you can invest when and where you want.

With real estate, you can take charge of your finances in a dependable industry. Unlike investing in the stock market, where you give control over to other people to manage your portfolio for you, you can be in charge of your real estate investing from the start.

Turn To Expert Property Management

If you would like to become a real estate investor, you need a property management company to help you deal with the day-to-day tasks. At Terra Residential Services, we can offer the experience and assistance you need to make your investments a success.

Contact us today to begin your journey into real estate!