Is real estate investment profitable now? Why?
YES! Real estate investing is one of the best ways to make money and create wealth. Here are some reasons whyis profitable right now:
1. Cash Flow/Return on Investment
This one is a no-brainer. Real estate investment properties provide a real estate investor with a guaranteed and steady source of cash in the form of monthly rent. In addition, as a real estate investor, you can always findfrom your investment property, thus generating a positive cash flow and a better return on investment (ROI).
2. Leverage to Build Wealth
Leverage is a tool that real estate investors can use to build their portfolio of investment properties. When you get a mortgage for buying a real estate property, you’ll have leverage that you can use to invest in morewith less money down!
Most loans require 20% of the property purchase price as down payment, while the bank finances the other 80%. Let’s say you put 20% down for the purchase of a $100,000 investment property. You only have to pay $20,000 now, and you have the next 15-20 (or even more) years to pay the remaining $80,000 plus interest.
Thus, real estate investment is profitable because investors have the opportunity to buy several investment properties with little money down and increase their rental income!
3. Ability to Buy Low and Sell High
In the real estate investing business, there are a number of strategies where real estate investors can make an instant profit by buy low and sell high, like the. When following this investment strategy, property investors are basically buying an investment property for a cheap price because it needs renovation or for being a , they renovate and then sell them for a higher price that covers the purchase price, the costs of renovations, and a profit margin.
to find cheap investment properties to purchase!
4. Tax Benefits
Real estate investment is profitable because there are certain tax benefits provided only to real estate investors. For example, youris tax-free, and your property taxes, mortgage interest, operation expenses, and insurance are all tax deductible. Exactly how much a real estate investor can deduct depends on the rental income.
5. Hedge against Inflation
can be a potential hedge against inflation. What this means is that market prices for real estate properties rise automatically as the cost of living also increases. This is beneficial for a real estate investor for three main reasons:
- Property investors can raise the amount of rent they charge as inflation increases.
- The will go up enough to cover for inflation.
- Mortgage payments are not affected by inflation, thus they actually decrease as inflation increases.
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