5 Reasons to Invest in Real Estate

According to the National Association of Realtors (NAR) second-home sales (for vacation homes and investment homes) a booming market in 2007 reported 27.7% of all homes purchased were for investment while another 12.2% were for vacation homes.  In 2009, the tables have turned.  Today's economic conditions are showing an increase in the lease/rentals of these types of properties. While vacation-home buyers purchase primarily for enjoyment, investment-home buyers are looking to generate income in the following five ways.

•1.       Appreciation
Returns of 10 percent and more are not uncommon if you select good real estate properties. It's a return rate you won't find on bank products or with most stocks.

•2.       Cash Flow
More than half of all investment-home buyers rent out their properties. Month in and month out these properties create income from renters AND gain long-term appreciation

•3.       Less Volatility
While real estate cycles through periods of highs and lows, it doesn't change dramatically day-to-day like stocks. Investing in real estate is viewed as being less speculative than stocks.

•4.       Tax Advantages
Your real estate investments offer you two tax advantages: you can deduct property expenses and depreciation. Plus doing a 1031 exchange lets you avoid paying tax on profits from the sale of rental property if you roll it into another real estate investment property (talk to your tax advisor).

•5.       Value-Added Improvements
The saying "buy it low and sell it high" applies to stocks and real estate. The advantage with real estate is you can buy inexpensive property, fix it up, then raise the rent or sell it for more money.

If real estate investing is a path you are interested in pursuing, please feel free to call or e-mail with any questions you have!