FUNDING
PROFITABILITY
6 Reasons Why Real Estate Is a Good Investment AN ARTICLE SERIES ON NAVIGATING THE PRIVATE LENDING WORLD
By Damon Riehl
A s the world’s population grows, so does the demand for housing and its associated ameni- ties. Several benefits make real estate investment a safe and reward- ing option: potential capital gains, ongoing rental income, and tax advantages. Whether you’re looking to invest in a rental property, a piece of land, or even a commercial property, there are many reasons why real estate can be a profitable investment option. REAL ESTATE INVESTMENTS ARE RELATIVELY STABLE. Unlike stocks or other types of investments, real estate is not subject to the same level of volatility. It means you’re less likely to experience significant losses, even in a down market. Additionally, because real estate is a physical asset, it’s not sub- ject to the same risks (e.g., currency fluctuations or interest rate changes) as other types of investments.
income, which can help to offset your expenses. An investment in rental properties can be especially bene- ficial if you’re looking to generate a steady stream of passive income. Additionally, because real estate values tend to appreciate over time, you’ll also see your property’s value increase, which can lead to even more profits. OWNING PROPERTIES CAN OFFER TAX BENEFITS. Depending on the type of property you invest in, you may be eligible for depreciation or mortgage interest deductions. These deductions can reduce your taxable income, saving you money in the long run. INVESTMENT PROPERTIES OFFER A HIGH LEVEL OF CONTROL. Real estate allows you to have a say in how your property is used and managed. It means you can choose to invest in properties that align with your investment goals, such as rental properties in a desirable location or commercial properties in an
area with a lot of growth potential. You can also choose to manage your properties yourself or hire a property manager to do it for you, giving you even more control over your investments.
YOU GAIN THE ABILITY TO LEVERAGE.
Leveraging is simply borrowing money to increase your return on an investment. Basically, you’re using other people’s money so you can put down a smaller amount of money when you buy a property.
THEY OFFER A STEADY STREAM OF CASH FLOW. When you invest in rental prop- erties, you receive regular rental
44 | think realty magazine :: july – august 2023
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