Buying a real estate property requires a significant amount of investment. If that is the case, then why not just turn it into a really profitable investment? And when it comes to real estate investment, your best bet is to buy a rental real estate property. And here are the top 5 reasons why you should.
1. You get regular cash flow.
If done correctly, you can have a steady flow of cash every month. And since many of todays rental properties are leased on a minimum of a 12-month contract, that simply means that your tenants will be providing you with the cash flow for at least the same length of time. That is why it is crucial to talk to a licensed estate agent to help you identify the best rental properties to invest in.
2. Your investment appreciates over time.
Compared to other types of investment, a real estate property is largely considered as an appreciating investment. Sure there are downtimes but if you are able to manage your expenses well, you should be able to see the appreciation of your propertys value over time. Besides, everyone needs a shelter to call their own. Somebody will always be looking for a place to rent to call their temporary home at any given time.
3. You leverage others money.
While it may sound rather demeaning or considered as downright exploitation, leveraging others money has been the principal aim of many financial institutions including banks, lenders, and others. This is used to buy other income-generating or producing assets. You will be technically using the payment of your tenants to help you save more and buy additional rental real estate properties. Over time, you will have several rental properties which you can use to provide you with higher cash on cash returns. Now, isnt that a worthy investment?
4. You get tax benefits.
There are a lot of tax benefits to owning a real estate property. You can enjoy tax deductions on depreciation on each of your real estate properties, your mortgage interest, your maintenance and repair expenses, and even travel expenses. At the very least, you are already assured of a regular cash flow. And while you do have expenses incurred in the upkeep of your property, your tax deductions can amount to considerable savings which, when added to your cash flow, can ultimately increase your overall net worth.
5. Prepare for early retirement.
While you are still in your peak, you may want to start planning for your retirement. Getting a house may be what you consider a good retirement option. But getting a rental real estate property is way much better. Just consider the regular monthly cash flow that will you are guaranteed. And if you are able to manage your finances well, you can grow this investment a lot further.
Investing in a rental real estate property is a sound decision. To help you determine the best property to invest in, you will need the services of the right estate agent for you. Make sure you check the estate agency credentials, reviews and knowledge of the area where you will be buying and renting out your properties.
