Real estate investment involves buying, sale, ownership, management, and rental of real estate for profit.
A lot of benefits come with investing in real estate that outweighs the initial cost and as an investor, you can earn a steady flow of income to secure financial success. So here are five benefits of investing in real estate:
This is the net income made from investing in real estate after mortgage payments have been made. Real estate investment has a great ability to generate cash flow and most of the time, this strengthens over time as mortgage is paid and equity is built.
Build equity and wealth
Once you pay for a property mortgage, you build equity; an asset that is part of your net worth. As equity grows, the leverage to acquire more properties and increase cash flow grows even higher.
Real estate leverage
Leverage refers to the use of financial instruments or borrowed capital to increase return e.g if you make a 20% down payment on a property mortgage, you will get 100% of the house you want to buy.
Real estate values increase over time and with a good investment, you can turn a profit over when it’s time to sell. Investors make money from rental income.
Tax break and deductions
Investment in real estate offers numerous advantages like tax breaks and deductions. That means that you can deduct reasonable costs of owning, operating and managing a property.