The major benefits of investing in real estate
Are you unsure of sinking your funds and resources into real estate? Well, continue reading to learn all the benefits that real estate has in store for you.
You might have heard of all the benefits that come with investing in real estate. There are some who are looking to quit their 9 to 5 and dive into full-time real estate investing. Others are already thinking of retirement. By investing in the right location and the ideal type of property, you stand to gain much from the property market.
Before you invest in property, we advise that you consult a real estate professional. Rely on an experienced and reputable service provider whose advise you can bank on to make calculated investment decisions. Sapphire Capital Investment, a leading investment company in Tucson, gives you some the major benefits of investing in property.
A majority of investors in property market can attest of the steady flow from leasing out their property. Real estate is a very good source of passive income. Investors are recommended to choose properties in locations where demand is high. Situated in the right market, you can gain enough to cover expenses, pay off your mortgage (if any) and still take home a substantial amount in profits.
To continue enjoying the stable income, you will have to maintain high levels of management. Your property always needs to be in tip-top condition. This way your tenants will feel valued and appreciated and renew their lease when the time comes.
When it comes to property investing, you have heard of the mantra ‘location, location, location’. The team at Sapphire Capital Investment cannot emphasize enough the importance of location in property investing. Appreciation in value over time is also dependent on the location.
While other assets are known to depreciate, land and buildings are appreciating assets. Appreciation is however a factor of the location. Some of the factors that are responsible construction of new transportation options in the area, scarcity of vacant lots, high demand/ population increase and other market drivers.
A disclaimer however must be added. It is not always guaranteed that the value of property will increase indefinitely. This is because value is a function of other drivers. It doesn’t exist in a vacuum.
By investing in real estate, you can benefit from several tax exemptions. This is a significant benefit considering how much in taxes you can pay in a year. The government offers several tax benefits for insurance, maintenance repairs, legal fees, property depreciation and travel expenses. Property is also entitled to lower tax rates when one invests long-term.
One tax benefit that is usually overlooked is the 1031 exchange. You can legally avoid paying for capital gains tax when you want to sell the property. For more information on the same, get in touch with us today.
A hedge against inflation
Inflation is an uneconomic ill that reduces the purchasing power of the citizens. During times of inflation, the cost of living significantly increases and you will hear every Tom, Dick and Harry complaining of the hard times. But one class who are smiling all the way to the bank (literally and figuratively) are property owners.
Even with an increase in inflation, your rental income and property value increase similarly. To increase your rent in tandem with the increase in inflation, this must be stipulated in the rental agreement. It is recommended that property owners should not offer their tenants long-term leases that have fixed rental prices. Always allow for rent reviews and include clauses that cater for inflation.
The benefits of investing in real estate await! Are you ready? Contact Sapphire Capital Investment with your financial goals, short-term or long-term together with your preferences. Our team has been able to advise hundreds of investors in the past and can do the same for you.