Use real estate to manage risk - Several years ago I discovered that real estate is the best investment for risk management and wealth creation, and Forbes magazine says that you are three times more likely to get rich through real estate than any other type of investment.
GRATIS NONTON LIGA EROPA
ADA DIBAWAH
Join the control
Real estate can be an active participant in the decision-making process, thus managing risk. Passive investments such as stocks do not provide this opportunity. Real estate price movements are less volatile than the stock market.
Most people do not understand the economic forces that affect the market. Real estate is less volatile and therefore easier to manage and understand. Concrete real estate. You can touch it, you've been exposed to it your whole life, and you can identify with it.
Effectively reduce taxes
Real estate ownership remains the most popular form of investment due to the significant tax savings. Because of your active involvement in managing estates, the Internal Revenue Service (IRS) now allows eligible individuals to write off up to $25,000 annually for salary and other income.
No other investment offers this ability. Additionally, you can use a tax deferred swap to defer paying income tax on your earnings indefinitely.
Pairing that works
Real estate is the only major investment that you can own with very little money. This degree of leverage allows you to use other people's money to magnify your profits. The more assets you control, the higher your chances of success.
The degree of financial leverage is calculated by dividing the total purchase price of the property by the amount of the purchase capital. So if you buy the property with a down payment of $10,000 and a loan of $90,000, you will achieve a leverage ratio of 10:1. The higher the leverage, the more capital will flow in and out as the value of the asset changes.
3 benefits from rental income properties
Rental income properties should outperform other major property types because they are generally stable. This stability has three main factors:
1. Occupancy rates are less susceptible to business cycles than other types of real estate investments. It doesn't matter if interest rates or home prices are high or low, rental income properties are generally more affordable.
2. Lease terms for rental income properties are short. This provides greater inflation protection than long-term leases attached to other properties. This means that rents can often be negotiated.
3. Tenant pools are much larger in rental income properties than in other types of properties. This ensures more consistent occupancy than industrial and commercial properties, which typically have a small number of tenants to choose from.
LINK 1
The size of the building that gives you the greatest potential for profit
When investing in a residential property, try to find the right building size to maximize your time and maximize your profit potential. Single-family homes and condos don't always work because of competition and property management issues.
Managing your assets on a daily basis may not be for you. You can spend as much time in a 4-unit building as you can in a 40-unit complex, but you won't make a lot of money.
Larger units are the domain of institutional investors and cannot compete with their availability of financing, and you may find it a very niche.
The next jackpot is yours
Supply and demand plays an important role in the value of a property from housing income. The demand for rental properties is increasing with the number of people entering the rental market steadily increasing every year.
At the same time, construction costs, stricter zoning laws, and environmental factors limit new construction of residential income properties. Together, these trends bode well for investing in residential income real estate.
Since the 1997 tax law exempted co-owners from capital gains of $500,000, more and more people are selling their homes, saving money and moving into rental properties. It is estimated that rental demand is likely to grow by more than 10% over the next decade.
Residential income properties provide one of the best protections against inflation. In fact, a study published by the Journal of Financial Economics found that residential real estate was the only investment that provided an ideal hedge against expected and unexpected inflation.
Shockproof
Real estate generally outperforms stocks because of its higher yields, stable prices, and downside protection during downturns. Even when the stock market is down, real estate retains its value and generates positive returns.
Real estate is less prone to booms and busts than it was in the past. Residential income-generating real estate is stronger now than it has been for many years.
Overview
Rental income properties are investor friendly because they can be seen and touched and are not an abstract form of ownership.
One can distinguish the door by the window, the bedroom by the bathroom, the floor by the ceiling. They do not feel that the market is being manipulated by programmed buying and selling. They have more control over their investments.