8 Reasons Real Estate is the Best Investment
Are you looking for an awesome investment opportunity that can help you build your wealth? Look no further than real estate! Especially here in Bellingham, Washington area where we are based, the area is growing in popularity and population. Here are eight reasons why it’s the best investment out there:
1. Steady Cash Flow: If you invest in rental properties, you can expect a steady cash flow each month. Expenses are predictable, and if you keep your properties occupied, you can rely on a consistent profit margin.
2. Appreciation: Real estate consistently appreciates in value, even during economic downturns. On average, real estate in the US appreciates between 3-5% annually. So, not only are you making money every month, but your investment is also growing over time.
3. Retirement: Paying off your mortgage during your working years means you'll experience greater cash flow when it's paid off. Investing in real estate can help you retire more comfortably.
4. Lower Taxes: When you sell your property, you are taxed at a lower rate than other types of income. Short- or long-term capital gains tax brackets are usually lower than income tax brackets.
5. Leverage: Investing in real estate allows you to leverage your money. When you take out a mortgage to purchase property, you reduce the amount of capital required. As you build up equity in the property, you can borrow against it or refinance the original loan, freeing up cash to buy another property.
6. Control: You have control over your investment in real estate. Unlike stocks, where you have no control over how they perform, you can improve upon your real estate investment. Updating or upgrading systems, finishes, appliances, and landscaping can help build value in your investment.
7. Tax Deferral: Under the 1031 exchange tax code, you can invest the gains from the sale of one property to the purchase of another property without paying taxes on the gains. This allows you to keep reinvesting your money and grow your portfolio without being taxed on the gains.
8. Depreciation: You can legally claim a depreciation expense on an investment property, even though the value of your investment property is actually appreciating. The depreciation deduction allows investors to generate a higher cash flow while reporting a lower income for tax purposes.
So there you have it, folks. Eight rock-solid reasons why real estate is the best investment out there. Ready to go ahead and start building your investment portfolio today? Reach out to us and we can go over in detail how we can help you succeed!