Why You Should Invest in Real Estate

Credit: Nattanan Kanchanaprat via Pixabay

Many people are seeking a way to make their money work better for them, but sometimes it can be hard to determine the right way to do that. While real estate investing has become more popular and accessible over the years, it can be intimidating to people who don’t have experience in that space. Worries can surface that it won’t be worth it or they’ll lose money.

But real estate is an investment worth making for a myriad of reasons. If you’re looking in a booming area like Whitby, you have the potential for significant returns. Investing in a house for sale in Whitby can bring many benefits.

Here we’ll explain why real estate investing is a good idea and why you should consider adding it to your investment strategy.

Increase Your Cash Flow

Unlike with other types of investments, real estate is generally purchased with borrowed money in the form of a mortgage. If you buy and hold the investment, you can immediately increase your monthly cash flow by renting it out. Many real estate investors then choose to use that cash flow to continue growing their portfolios and build their wealth. This also means you don’t have to rely solely on the house appreciating. 

Diversification

There’s a reason so many successful investors tout diversifying your portfolio. It all comes back to the old adage, don’t put all your eggs in one basket. Because if you do, it doesn’t take much for something to happen, and before you know it, your basket has dropped, and all your eggs are broken. 

If you have all of your money in one place and something unforeseen happens, that’s it; it’s all gone in one fell swoop. It’s wise to spread your investments out in stocks, bonds, ETFs and, of course, real estate.

Tax Benefits

There are a lot of tax advantages to investing in real estate. If you rent the property out, it’s both an investment and business, increasing the opportunity for tax write-offs. A few expenses that can be written off include:

  • Real estate taxes and homeowner’s insurance
  • Maintenance expenses
  • Depreciation
  • Mortgage interest 

Real estate investing comes with many expenses that can be written off, which is a huge advantage come tax time.

Greater Control

Many investors feel frustrated when investing in stocks because there are so many factors that are beyond their control. While real estate isn’t immune to outside forces, there are far more opportunities to control your spending and profits through key decision-making. This can help you see more significant profits from your investments.

Consider these benefits and look into real estate investing to diversify your portfolio, increase your cash flow and tax benefits, and have greater control over your returns.

Adam Hansen
 

Adam is a part time journalist, entrepreneur, investor and father.