Looking for ways to invest and create new financial opportunities? One of the best investments, experts agree, is to invest in real estate.
5 Reasons to Invest in Real Estate
1. Appreciation Potential
Real estate has historically shown the potential for long-term appreciation in value. While short-term fluctuations can occur, well-chosen properties in desirable locations tend to increase in value over time. This appreciation can lead to significant gains if you decide to sell the property in the future, or create equity that can be leveraged for your future investments.
2. Passive Income
Real estate investments can provide a steady source of passive income through rental properties. By owning and renting out residential or commercial properties, you can earn rental income that may help cover mortgage payments, property maintenance costs, and potentially provide extra cash flow.
3. Portfolio Diversification
Real estate can be an essential component of a diversified investment portfolio. Adding real estate to a mix of stocks, bonds, and other assets can help reduce overall portfolio risk and increase potential returns. Real estate’s low correlation with other asset classes means that its performance might not move in lockstep with the stock market.
4. Tax Benefits
Real estate investments offer various tax advantages. Depending on your country’s tax laws, you may be able to deduct mortgage interest, property taxes, insurance, and depreciation from your taxable income. Additionally, 1031 exchanges (in the United States) allow investors to defer capital gains taxes by reinvesting proceeds from the sale of one property into another like-kind property.
5. Offset Inflation
Real estate investments can act as a hedge against inflation. As the cost of living increases over time, rental income and property values tend to rise as well. That means that while your cost remains the same, the revenue from this investment will be increasing, which helps preserve your purchasing power and protect your investment returns.
“I understand why I should invest in real estate, but how?”
If you are like many people, you see these reasons to invest in real estate and think to yourself “but how?”
Don’t make the mistake of thinking that buying real estate properties to generate passive income requires significant capital. In fact, we have multiple solutions for you that can allow you to invest in real estate without a W-2 income to present.
A cash flow mortgage is perfect for investors who have good credit, but don’t have the income to qualify for a typical loan. These work by qualifying you base don the rental potential from the investment property rather than your income.
We look at an appraiser’s estimate of the market value of the property and how much we can reasonably expect you to earn in monthly rent from it, and then work with that number. We understand that if you have a valuable property that can generate income, that can verify your loan even if your current income would not cover the monthly mortgage payments.
If you know you have the money to invest in a property, but you don’t have the W-2 income to prove it, a bank statement mortgage might be the right fit. These mortgages are approved based on your bank statements, rather than your tax returns or pay stubs.
You can provide 12-24 months of bank statements to show your financial strength and position to invest, rather than showing us your salary. This is ideal for self-employed borrowers, gig workers, or anyone with a unique income situation.
Ready to learn more about your options or find out if you qualify for an investment mortgage? Contact us any time.