The purchase of properties has been since ancient times the best means to create wealth. The real estate market is a stable investment, unlike buying stocks on the stock market, which can have huge fluctuations.
Here I mention eight reasons to buy a property:
- Beyond the financial aspect, everyone needs a home for the family to develop and focus on achieving her goals. The number one reason most people buy property is to live in it. You have to live somewhere, and if you are a landlord, the rent money is invested in a property that you own. Therefore, this investment is essential if you have the resources to access the property. The value of the investment will depend on each family and the means they have.
- It is an asset, this in financial term, implies that it can generate economic benefits in the future. You can rent the space, either per room or in total. Your property can generate regular income. If you invest in a multi-unit or rental property, you will earn recurring income. If you live in a duplex, for example, the rent received from the apartment you rent can help pay your mortgage. The more rental units you have, the more profitable it is. But do not forget that you will have to take care of the maintenance and management of the building.
- Provides independence. You can remodel it to your liking and make the appropriate modifications to make your life at home more pleasant or to significantly increase the value of your property.
- It is a long-term investment. The value of your property generally increases over the years. If you properly maintain your home or building, it will have a higher value over time.
- You benefit from tax deductions. If you own a rental property, you may be able to get tax deductions for certain costs related to rented accommodation. Also, if you are self-employed and work from home, you can deduct taxes on a percentage of the mortgage payments.
- You can take advantage of leverage. Over time, you will make a profit on your property. The difference between your debt and the present value of your property allows you to benefit from a leverage effect: thanks to this accumulated value, you can obtain a second mortgage loan to invest in a next property. And the more income you have, the more you can take advantage of this benefit.
- Retire Income. If you do not have a pension fund or it may be insufficient, rental properties can finance your lifestyle for a long time. Your property can serve as a retirement fund. The stability and relative security of real estate investing make it an excellent investment tool for retirement.
- Tenants finance your investment. The rent paid by tenants is regular income, but it can also be thought of as tenants paying a large portion of your mortgage loan, depending on your down payment. Therefore, they are contributing to finance your investment.
Real estate is a safer investment than most other forms of investment. If your children have to study in another city, buying a property can be help for them and, at the same time, a good investment for you.
To help you think of the different options that are right for you, team up with a Real Estate Broker!
