It would be fair to say that even through the big economic droughts; investors up and down the country have always kept faith with the proposition that real estate is going to provide them with eventual returns.
Sure, depending on the economic climate, these returns might be around the corner or in the very distant future. At the same time, while Houston might be seen as one area where investors can reap significant returns, other areas of the country might not be so lucky. In short, it’s a complete minefield, and a historic photo of the last few years simply proves this.
One man who has ridden the waves of real estate investing is Al Hartman. It’s from his advice that we have penned this article, as we take a look at some of the main reasons why real estate is always proving to be such an efficient means of investing.
In comparison to the stock market, real estate is gold
The stock market is usually something which is the benchmark for investors. In other words, they will compare strategies with this in a bid to see if a decision is wise or not.
When it comes to real estate and the stock market, there really is only one winner. Unlike the stock market, the risk of losses actually reduces the more time you hold onto real estate.
As well as the above, real estate provides a lot of leverage for other forms of revenue. For example, you might enjoy a steady rental income from a property, as well as knowing that the capital, historically at least, always tends to appreciate.
The value of real estate always increases
That last point leads perfectly onto the next one. If you were to take a look at a photo of the market over the last few decades, you will see that property prices have risen extraordinary. In short, the longer you hold onto real estate, the more money you are going to make.
That’s not to say that you might not come across a bubble, which may temporarily give you some worries. However, even if this does happen, history dictates that there will always be a recovery and this means eventually you will benefit even more.
In terms of the short-term, if we were to look at every state in the country there was positive appreciation throughout.
The elusive tax benefits
One reason a lot of investors are so tempted by real estate is because of the huge tax benefits which are on offer. The fact that deductions are available on mortgage interest can obviously make a monumental difference to your bottom line. When this is combined with the deductions available on the operating expenses, insurance and sometimes depreciation, it really starts to come as no surprise that so many people are opting for real estate as their primary method of investment. These tax benefits also mean that the real estate market gets exceptionally busy near the end of the tax year!
2018 ·