Investors Only Resources

Why You Should Invest in Real Estate

There are plenty of things to invest in. Some people invest in stocks and bonds. Some invest in precious metals and others invest in real estate. That's right, real estate! Real estate is one of the best things you will ever invest in, and there are several reasons for this:

While the appreciation and depreciation of stocks and bonds depends heavily on whether or not a company does well, the appreciation or depreciation of real estate is dependent upon the housing market and whether or not banks will readily grant home loans to the people who apply for them. Even in a bum market, real estate has a fairly steady appreciation value of at least four percent. Not convinced? Ask your parents what they paid for the house you grew up in and then find out what it would sell for now.

When you invest in real estate you build equity. Having equity builds your credit rating and the faster you pay down your mortgage, the more equity you build up. The more equity you have, the better you will look if you decide to keep investing in real estate if your first investment goes well.

As long as you are not a real estate dealer, you are allowed to depreciate the value of your real estate on your tax returns, which is a great tax break! Of course when you sell the property you sell it for more than what the value is in your accounting records, the depreciated value, you have to declare the gain as income.

Real estate is something that will always be in demand. There is always a need for housing and commercial space and if you invest well, you could easily retire on the profit you make from your investment!

IRC Section 1031. This is a tax law that says that an investor can sell and then repurchase a property without facing tax liability. This tax section is not applicable to any other type of investment!