Real estate offers many tax advantages. There are potential tax breaks for improvements, depreciation on paper, professional services like property management, and more. There are a variety of business tax advantages for those that incorporate. Those investing for the long term can also reap great tax savings by investing through vehicles like self-directed IRAs and 1031 exchanges.
3. Equity Appreciation
Real estate typically grows in value in tandem with inflation. In fact, it often outperforms inflation. This makes it a passive wealth building tool, which can simultaneously add equity and income.
4. Strong Rental Market
America’s housing dynamics have changed. We’ve moved much closer to being a nation of renters, than homeowners. Various dynamics in the market are likely to keep things this way for a very long time. It’s hard, and getting harder for regular home buyers to buy homes. Many are more happy renting. If we look at more advanced and older economies around the world, many have much higher percentages of renters. This makes single family homes a great long term investment play, with good upside potential for raising rents.
5. Low Cost Leverage
Low interest rates and new more efficient real estate lending facilities like blanket mortgage loans are making it very attractive to use financial leverage to get ahead. This leverage enables single family home investors to earn cash flow and benefit from equity growth on far more real estate than if they just used their own cash.
6. Brick & Mortar Security
Savvy investors understand that real estate offers this major advantage over stocks and other investments. The tangible, hard asset collateral single family homes represent keep investors safe regardless of what the market does.
Single family homes offer a lot of flexibility to investors. They have the largest resale market pool, and are the most traded type of property. That, along with appreciation and financial leverage makes for great liquidity and flexibility. Even in a down market homes can be sold on seller financing terms to create notes and debt investment assets, can be rented, or can be repositioned.
There are many reasons to invest in single family homes in 2017. The net benefits can far outweigh the appeal of any other asset when you add them up. Find out how you can gain more leverage and go bigger in single family home investing this year with RentalHomeFinancing.com.