With the stock market experiencing increased unpredictability, many investors are turning to alternative ways to balance their portfolios. A survey by Bankrate recently found that 28% of investors prefer real estate, as opposed to only 17% who chose stocks. So, what makes real estate an attractive investment? There are 4 main reasons:
- Cash flow- A rental property brings postitive cash flow in the form of monthly income. A rental property can also include vacation homes such as a beach house, or even using Airbnb to rent out extra rooms or separate buildings on the property.
- Tax breaks- Deductions and depreciation are two tax advantages to owning real estate investments. Your tax professional can advise you how to best take advantage of these and other perks.
- Principal reduction- As your tenant pays down your mortgage, the equity in your property rises, helping you to increase the return on your investment.
- Appreciation- When you invest in the stock market, your return is calculated based on a percentage of the money you have invested. In real estate however, appreciation is calculated based on the total value of the property. This means that even if you only put 20% down on your investment property, appreciation is calculated based off the entire value, not just the amount you put down.
So, where do you begin if you are interested in diversifying your investment portfolio by purchasing a rental property? With a real estate team that knows the best areas for rentals, and can help you make the numbers work. Witht the hot spring market in full bloom, now is a great time to start looking at your options and begin bringing in that positive cash flow. Contact Treehouse Realty VA, Long & Foster Gold Team today to begin your investing!
Written by Haley Beck of Treehouse Realty VA, Long & Foster Gold Team
2931 Polo Pkwy, Midlothian VA
(804)516-6915 | bestrvahomes.com |email@example.com
Licensed Realtor in the Commonwealth of VA