Golden Realty – The Answer to Buying or Selling Property
Here’s what Warren Buffett said about investing in two real estate deals he did: Though the gains won’t be dramatic, the two investments will be solid and satisfactory holdings for my lifetime and, subsequently, for my children and grandchildren. Read more.
Financial Benefits of Owning Real Property
Ask nearly any real estate investor and he or she will be able to immediately rattle off the following four big advantages of owning income-producing real estate:
1. Investment. Real estate ownership has traditionally been one of the most reliable investment alternatives in the United States. According to Chris Seabury, writing for Investopedia.com, investing in real estate has generated “consistent wealth and long term appreciation for millions of people.” While there are obvious downsides to investing in real estate, over the long-term, real estate has consistently been a good performer for investors.
2. Equity. For rental property, as your tenants make their monthly mortgage payments, and you use their money to pay off your debt, you build equity. Equity also grows as house prices rise with inflation. A simple explanation of equity is the amount of money your property is worth over and above what you owe on your mortgage.
3. Use of Equity = Leverage. As you build equity, you can refinance your property, take the cash out, and use the cash to buy more property.
4. Income Tax Deductions. Current income tax codes allow you to deduct payments made for interest paid on a home mortgage as well as the expense of real estate taxes and repairs and maintenance. No stock gives you this kind of tax advantage. These deductions can represent a significant tax savings for you which means more money in your pocket.
No doubt, the same real estate investors will be able to just as quickly rattle off the down sides of owning income producing real estate and any financial advisor will be able to make a good case for investing in stocks, bonds or annuities instead of real estate. The argument about whether it is better to invest in real estate or buy stocks and bonds has been raging for decades, and will likely go on for decades more. But the bottom line is this: that argument is comparing apples to oranges. The answer really depends on each person’s preferences and tolerances.
If you currently own investment, income producing real estate, then you’ve answered the question for yourself. And if you’re a current owner, you’re likely familiar with the current market and the current trends in rental income. Rents are high right now our area. Rental real estate is a good bet right now. If you’re ready to add to your holdings – CALL GOLDEN REALTY TODAY.
If you don’t currently own income-producing real property, CALL GOLDEN REALTY TODAY and we’ll help you find something that fits into your portfolio.