Real estate is perhaps one of the most promising businesses to put your money in, especially if you’re just starting out. And this is especially true if you’re looking at investment properties such as residential and commercial properties. Here are five reasons why :

Tax Benefits

It’s a little-known fact that you can claim deductions on the interest you pay on your home loan, and for any property loan, for that matter. You can also claim deductions on the costs of owning and maintaining your property, such as council rates, repairs, and maintenance, or rental property insurance.

If you own an investment property and rent it out, you may be able to claim a range of deductions against your taxable income to reduce your tax liability. However, these tax benefits are not limited to investment properties; if you borrow money to buy land or construct a building (including a new home), you may also be eligible to claim certain tax benefits.

Equity Passive Income

Equity Passive Income is where the rent that you receive covers all costs associated with owning a property, including the mortgage. This allows for your investment to be positively geared and provide you with cash flow each month which can go towards paying off other debts or expenses, such as groceries and bills.

How Does Equity Passive Income Work?

Equity Passive Income = Your investment property’s equity + the rent it earns (minus expenses). So if the value of your property increases by $100,000, and over that same period, it earns $15,000 in rent while having expenses of $8,000 (e.g., rates and insurance), then at the end of that time period, you’d have $107,000 in Equity Passive Income.

Potential for Appreciation in Value of Property

The value of properties has been increasing steadily over the years. This is especially true for properties located near upcoming infrastructure projects like the construction of new highways, hospitals, and schools. Sometimes it’s also possible to predict which areas will become popular housing locations based on where large companies are setting up offices or factories.
This gives buyers who invest in properties a chance to sell them at higher prices, giving them a good return on investment. Even if you don’t want to sell your property, you can rent it out and earn rental income, which can be used to pay off your home loan or even save for your retirement fund.

How Can You Tell if Your Property is Appreciating in Value?

However, it’s important to know how to tell if your property is appreciating in value. Basically, there are a few ways to tell :

Comparative Market Analysis (CMA)
This is a common approach used by agents when they appraise the value of a property. A CMA compares the selling prices of similar properties in the same area. If these properties have been selling at an increasing price per square foot over time, then it’s quite likely that your property has been appreciating as well.

Cost Approach
This approach compares the cost of building a property yourself with what you would need to pay for it today. For instance, if a new building costs $200 per square foot while an older one costs $100 per square foot today, it means that the older building has appreciated in value by 100%. This helps you determine if your investment is worth it.

Easily Accessible and Massive Market
The real estate market is huge. This means that this investment option does not rely on small pockets of economic growth for success. Real estate is also easily accessible because it is very tangible, and investors can often see their investments right before their eyes. In addition to this, there are many different options when it comes to investing in property. You can buy a plot of land, an apartment building, or even just a single apartment unit.

Long Term Security
Hopefully, this never happens to you, but if you have an emergency and live in Texas, you can sell your property for cash to cash home buyers in San Antonio. If there is any disaster or crisis that happens and you need to get money out of your property, you can sell it for instant cash. If you do not have any other source of income, this is a great option for you.

Conclusion
Overall, investing in property is an exciting prospect. There is no doubt that it will be a long and arduous process, but there’s a lot to gain from it too. Even if you don’t see yourself as an experienced investor or landlord, the property is worth looking into. You never know if it could be the gateway investment you need to start off on the track to financial security.

5 Reasons to Invest in Property by Hannah Boothe