You’ve likely heard plenty of buzz around investing in real estate as a smart way to build financial freedom, passive income, and generational wealth. Investing in real estate can offer several potential benefits, which can make it an attractive option for a variety of investors.
Even if you don’t think you are able to become a real estate investor, you should keep reading. You may be surprised to find out just how accessible it is. Working with a lender that understands self-employed borrowers, entrepreneurs, and unique income situations is key. Contact us any time to learn more about your options, and keep reading to learn more about the benefits of investing in real estate.
Why You Should be Investing in Real Estate
Investing in real estate generates income in multiple ways. It can provide a steady stream of income through rental payments. This can be particularly appealing for individuals seeking regular cash flow to cover expenses or to save for other investments.
In addition, real estate properties historically tend to appreciate in value over time. This means that the property you purchase today could be worth more in the future, allowing you to build wealth through capital appreciation. Real estate often acts as a hedge against inflation because property values and rental income tend to increase with rising prices. This can help protect the purchasing power of your investments.
Real estate investors often benefit from various tax advantages. Mortgage interest, property taxes, and certain expenses related to property management can be tax-deductible. Additionally, profits from selling a primary residence may be tax-exempt up to certain limits.
Diversification and Control
Real estate can be an effective way to diversify an investment portfolio. It typically has a low correlation with other asset classes, like stocks and bonds, which can help spread risk. Real estate investments tend to be less volatile than stocks, making them a good option for those seeking stability in their portfolios. Owning a tangible asset like real estate allows you to minimize your investment risks and open up opportunities.
Real estate investments provide a level of control that other investments, like stocks, don’t offer. You can make decisions about property management, improvements, and tenant selection that can directly impact your returns.
How to Get Into Real Estate Investing
Even when you understand these, and the many other, benefits of real estate investing, you may assume you are not ready. Many people think that a massive amount of capital and an extremely high income is necessary before buying investment properties.
The good news is, this simply is not true. With creative financing solutions like a cash flow mortgage, you can qualify to purchase an investment property based on the potential for that property to generate income, rather than your own personal income.
Cash flow mortgages are approved based on your credit score and the potential cash flow of the property, which is determined by looking at comparable rental properties in the area. This means even if you don’t have the personal income to cover the investment, you can wisely select a property with the potential to generate enough rental revenue to pay for itself, getting into the real estate investing game far sooner than you may have anticipated.