Top 7 Reasons Why You Should Invest in Real Estate

Sure, having to invest in real estate isn’t as easy as you think. It comes with overwhelming processes and a little bit of risk. However, we can confidently say that property investment is an amazing path that can lead you to your financial goals and freedom.

We listed down some of the reasons why we believe that investing in properties has the greater chance of success:

1. Passive Income

Who wouldn’t want to earn passively? Nobody! This is why we listed this as the very first benefit of having an investment property. Definitely, it can be turned into an additional income stream, where you’ll be looking at getting extra cash every month without having to do much at all.

Just imagine if you are able to invest in not only one property but a number of them. Interesting, hmm?

2. Tax Benefits

Another unquestionable benefit of investing in residential properties is that even if the rental income doesn’t cover all of your expenses, there’s still a tax concession to take the edge off!

For instance, when you reach the end of the financial year, everything you’ve had to pay out of pocket, such as loan repayments, council rates, and utilities – they can all be used to offset your taxable income.

3. Capital Growth

You probably heard the saying that each property doubles in value every 10 years, right? Although this really happens, entering the real estate market with those expectations will probably lead you to disappointment.

What’s better is when you have a strategy and you know when is the best time to purchase in the market — and that is pretty much ‘any time’ as long as your finances allow it. Always remember that time in the market beats timing the market.

4. Early Retirement

In addition to passive income, one of the advantages of  property investment is that it’s possible to live out the dream of quitting your job early and living off your rental returns. This would especially be the case if you own multiple properties that you can even earn more than what you get from your day job at the office monthly.

So, plan carefully ahead if you want to retire early. Think about how long it will take to pay off your mortgage and how long it will take house prices to rise the amount you expect them to, and many more.

5. Power to Increase Its Worth

Another reason why investing in properties may be better than investing in something like stocks is that you can have a personal hand in increasing the value of your investment in terms of improving the physical condition of your property (painting, changing the floors, renovating of the kitchen and bathroom, building a granny flat, etc.).

6. Leverage Equity

Finally, once you’ve managed to successfully invest in one property, it will now be much easier for you to expand your portfolio by simply leveraging.

This would be a good tactic especially if your first investment property has risen in value; that means you have more equity. With that in mind, you can then refinance the property and use your new pool of equity as a deposit in making another investment in a property. It’s also certainly a great strategy if you want to save for a downpayment.

7. Property Manager

As mentioned earlier, the processes involved in property investment can be overwhelming. But, that doesn’t actually mean you will have to carry all the burdens. The good news is that one perk of investing in properties is that you can hire a property manager whom you can leave the hands-on stuff to. This includes setting up inspections, vetting potential tenants, and following up rent to a professional for a relatively low price per month.

Not only can it save you time and hassles, but a property manager has the experience to improve your investment’s performance.