Why You Should Invest In Real Estate

By Kurt Real Estate Nov 23, 2019

We all, at one point or another, think about that day – retirement day. We invest in a 401K or an IRA and save, save, save. But wouldn’t it be nice to have something making money for you when you’re no longer at the grind? A portfolio of investments should be just as important to you as your 401K, and real estate should be a part of that. According to Entrepreneur, here are five reasons why.

1. In real estate your return on investment is incredible. While the market does fluctuate, it is inevitable that your property value will increase, especially in Southern California. With rental prices on the rise, you can rent the property to cover the mortgage. Later, you could even consider a 1031 exchange or installment sale to lessen your tax liability.

2. If you leverage your capital, depreciation and mortgage interest deductions can make this cash flow tax free.

3. Depending on your classification and income, there’s a possibility your rental property will give you an overage of tax deductions you can use against your income.

4. Certain personal expenses pertaining to maintaining the property can also be deducted! This includes travel expenses to check on your properties and payments to someone who may manage the grounds for you.

5. It forces you to have a retirement plan. Once you purchase the property you are committed. You can come up with every excuse in the book to spend your savings, but once you purchase property you’re committed.

It takes long-term investing to get to a point where you can be comfortable retiring. Purchasing and renting out property is a long-term investment that can help get you there…with a few tax incentives along the way.