Whatever your politics are, we can all agree that the economy is growing. At Ali Safavi Real Estate, we’re excited about the housing market and its potential for profit. There is an abundance of real estate opportunities out there – if you’re ready to reach out and grab them.
Before you jump in head first, make sure you conduct a real estate analysis of the areas you’re looking to buy. If you want to be profitable, you have to make wise decisions that will allow your assets to appreciate. At Ali Safavi Real Estate we look at a number of factors before making a decision to buy. If you’re on the fence, here’s 6 perks for investing in real estate this year.
Perks of Real Estate Investing
- Cash Flow
This is the obvious number one. If I had a nickel for every time a friend mentioned wanting to get into real estate for the passive income, I could retire. Depending on your location, you could earn enough money to cover your expenses and have some left over. College towns and big cities tend to have the highest return. If one property goes well, then it could be the beginning of your own personal empire…but let’s start small. Location is really the key to success. At Ali Safavi Real Estate we look for cities that are on the rise. Hawthorne, CA is a good example. About ten years ago real estate was dirt cheap. Now that businesses have moved in there’s been almost a 20% increase. That’s what you want!
Tax exemption is another major benefits for owning real estate. Rental income is not subject to self-employment tax. In addition, the government offers tax breaks for property depreciation, insurance, maintenance repairs, travel expenses, legal fees, and property taxes. Real estate investors are also entitled to lower tax rates for their long term investments. What more incentive do you need!
- Your Tenants Pay
When you have a rental property, instead of paying the mortgage out of your pocket, it’s your tenants that are actually paying. Essentially you become the go-between. For this reason, you must keep your tenants happy. At Ali Safavi Real Estate we make sure to have excellent communication with all of our tenants. If you don’t and they don’t pay you, all of a sudden you are on the hook.
- Long Term Security
Unlike stocks that bounce up and down, the benefits of investing in real estate provide investors with long term financial security. While financial security may not come overnight, after years of positive cash flow, all of a sudden you have a financial nugget that most people would kill for. Owning a rental property can afford investors a sense of security because of the property’s appreciation in value over time. This means that your property’s value is most likely going to increase because land and buildings are appreciating assets. With that said, however, make sure to prepare for troubling times. The market could crash, a tenant could still you, the roof could start leaking. It won’t always be smooth sailing, but if you properly plan, it can be smooth sailing.
In case there was any question about it, real estate is a long term play. Your property isn’t a casino. There are no quick jackpots. With this comes the benefits of no big losses either. In other words, your property’s value will be worth way more 30 years from now, hence why investors are in it for the long run.
- Inflation Is Your Friend
One of the benefits of investing in real estate is a hedge against inflation. With high inflation, your rental income and property value increase significantly. Real estate investors welcome inflation with open arms because as the cost of living goes up, so does their cash flow.
- Remember This Is For The Long Run
If you already are in real estate investment or are just starting out, you do understand that real estate is not a short term investment plan. On the contrary, the benefits of investing in real estate include the appreciation of capital assets (aka land) over time. In other words, your property’s value will be worth way more 30 years from now, hence why investors are in it for the long run.