Three More Reasons to Buy Real Estate

Investing in real estate is much safer than the stock market, and you don’t need much cash if you are willing to do the legwork, but what else do you need to know before becoming a real estate investor dealing in homes or land?

3. You Can Do It!

Real estate can be such a financially rewarding area that it opens doors to countless amateur investors everyday. There are how-to books and seminars at every turn teaching wannabe investors a number of ways to make huge profits in the real estate market. And although it can happen, overnight success is rare. Anyone with the heart, mind and determination can make it big in real estate, but the keys are to continue learning and to monitor market conditions.

4. Use What You Have

While novice real estate investors can turn a quick profit by wholesaling their good deals, buy-and-hold investors can yield a profit by borrowing against (leveraging) their residential or commericial properties. Often times, lenders will allow holders of owner-occupied property to borrow up to 95% of their property’s value and up to 80% of non-owner occupied units!

This means that you can either purchase real estate with a minimal out-of-pocket investment or acquire financing that will allow you to pull cash out of your real estate’s equity to use for future purchases. Not a bad way to create cash.

5. Take It Off Your Taxes

The popular 1031 exchange and depreciation are just two of the big tax breaks that investors can use to their advantage. The United States government has set up multiple tax breaks favoring real estate investors. Owning real estate with the goal of making a profit allows you to deduct interest payments, repairs, and vacancies among other expenses when preparing your tax return. Not a bad deal, right? Just make sure you aren’t buying real estate only for the tax benefits.

Investing in real estate can be a way to make money regardless of economic conditions. However, before you buy a property make sure you know your time horizon. Will you sell it for a quick profit or will you hold it for a bigger return? Contact a Texas real estate agent to discuss the real estate market in your area.