Passive Income – One of the greatest benefits of investing in real estate is that investors hope to create “passive income.” Passive income is “income that requires minimal labor to earn and maintain.” It is true that once a property is acquired, needed upgrades and improvements are taken care of, and management of the properties is wisely delegated, the income really is passive. For most investors, there’s considerable education, time and money invested along the way so the income seems a bit less passive. Yet, once the fundamentals are learned it becomes easier to grow and create more income following the same model, therefore it requires less time. Eventually, the property gets paid off and then the income increases as the payments decrease, leaving money to retire on or pass on as a legacy to family.
Tax Breaks, Deductions and Depreciation – As with any other type of business, there are many tax deductions and advantages related to the costs of owning and managing your properties. Your investment property can possibly be depreciated for many years, even decades. And there may be opportunities to defer capital gains tax by using 1031 exchanges. Always check with your financial and tax advisors for a complete understanding.
Appreciation – Because real estate values tend to increase over time, chances are your property will appreciate in value. So, when it comes time to sell, you’ve gained value and equity by holding onto the property-–another benefit of investing in real estate.
A Tangible Asset – Many investors appreciate owning assets they can see and feel-–another benefit of investing in real estate. And, they realize that real estate is a fairly safe investment because property is always and will always be needed. Unlike newer investment options like cryptocurrency, buildings and land are generally less prone to price and income fluctuation.