5 Reasons Why Buying Real Estate Is A Smart Investment

Making the right real estate investment is an important decision that requires careful thought. As you consider these 5 reasons why buying real estate is a smart investment, the team at Carrie Fitts Real Estate is here to guide you through every step of the process – from start to finish.

You can purchase a house for your personal home, a generational shared home or second home, a flip or long-term rental property, or even land for your dream home one day.

Financial stability

Although we often think about buying real estate as a process for finding a great place for our family to live, investing in real estate can also provide a steady passive income stream and can offer an excellent return on your investment.

By investing in real estate, you’ll have the potential to earn rental income and benefit from capital gains over time. Real estate is also known for being far more stable than other types of investments, making it a great choice if you want to protect your wealth.

One of the major benefits of investing in real estate is the potential for tax deductions. When you purchase a property, you may be able to deduct certain expenses associated with maintaining and improving it.

Additionally, when you sell a property at a gain, the capital gains taxes owed may be significantly lower than they would be for other types of investments. With careful planning, you can significantly reduce or even completely eliminate your tax bill.

Furthermore, investments in real estate may also provide the opportunity for depreciation deductions. This allows investors to deduct a portion of their rental income each year and lower their tax liability. Finally, there is also the potential for additional tax incentives offered by local, state, and federal governments. These incentives can make investing in real estate even more attractive and profitable, which confirms these 5 reasons why buying real estate is a smart investment.

Ultimately, real estate investment has the potential to provide excellent tax benefits that can help boost your financial returns and lower your overall tax bill. This makes real estate one of the best investments you can make! To understand more about the tax benefits for your own, unique situation, be sure to consult a tax attorney or your CPA before moving forward.

Leverage

Real estate gives you the ability to use borrowed funds (leverage) to purchase an asset. This means you can acquire larger investments with less of your own capital.

Today’s homebuyers aren’t necessarily following the traditional home purchase game plan. In fact, millennials today are split between those who are buying a home before they plan to do so and those who are delaying home buying. 46% of millennials buying a home are doing so today because they believe it is a good investment. Many of these home buyers do not put down 20% or more, which they balance by having higher mortgages.

Hedge against inflation

One of the best reasons to buy real estate as an investment is that it can be a great hedge against inflation. Unlike cash, which loses purchasing power over time due to inflation, real estate can appreciate in value as the cost of living rises, providing a hedge against inflation and helping you stay ahead of rising costs.

As the cost of goods and services rises, so does the value of your property. This means that you will always have something valuable to show for your investments, regardless of what’s happening in the economy.

Real estate also has the potential to appreciate in value if you invest in the right area. This makes it an attractive long-term investment option that can help protect your money from inflation.

Investing in real estate also gives you more control over your investment since you have a physical asset, as opposed to other investments like stocks or bonds which are subject to market fluctuations. With real estate, you can diversify your portfolio and have a buffer against inflation. Consulting with your CPA or a real estate attorney about investing is always a smart idea before purchasing.

Over time, real estate values tend to appreciate in value, which can potentially increase the wealth of the homeowner and provide a nice return on investment. Property values can rise for a number of reasons, including increasing demand for new housing; an improving economy; and a growing population. In addition, certain areas may also benefit from gentrification, which increases the value of real estate in the vicinity.

Erik J. Martin, in an article for Bankrate, notes that April 2023 was the 133rd straight month of home price growth, as reported by CoreLogic’s U.S. Home Price Insights report.

According to Linda Bell at NerdWallet, however, investors should be sure to consider not only the pros of buying investment real estate, but also be aware of some of the cons, including cash liquidity challenges, dangers of losing money when flipping homes, and considerations surrounding managing investment property.

Having a tangible asset such as real property also gives investors added security compared to stock investments which can be more susceptible to market fluctuations. Investing in real estate is an excellent way to build and preserve wealth over time. When you invest in real estate, you are making a decision that is likely to pay off in the long run. Check with your CPA or tax professional to see if this is an option for your own financial situation.

Investing in real estate can be a safe and secure way to build your wealth, providing peace of mind knowing that you have the financial security to weather any economic conditions.

The agents at Carrie Fitts Real Estate understand the importance of finding the right property for your investment needs. We’ll work closely with you to determine what kind of real estate investments are best for you and make sure that you get the most out of your investment. With experience in both commercial and residential properties, we offer a wide range of options to choose from.

Our agents take the time to listen and understand your individual needs in order to find the perfect real estate investment for you. With our commitment to excellent service, it’s easy to see why Carrie Fitts Real Estate is the go-to source for those looking to make a smart and responsible real estate investment.

Don’t wait any longer – make an investment with Carrie Fitts Real Estate today and reap the rewards for years to come!