Here’s EXACTLY why I chose to nearly invest everything into real estate, exactly what I look for in a property, and what makes it such a good investment in the first place - enjoy! Add me on Instagram: GPStephan
Now one of the first, and main reasons I’ve chosen to invest in real estate is a very simple one, but also something not enough people fully appreciate: LEVERAGE.
This is the practice in which you borrow CHEAP money…that then goes and makes you MORE money somewhere else. That allows you to profit the difference between what you pay in interest, and what that money makes you.
Now secondly, another HUGELY important reason I invest in real estate…as well as pretty much everyone else out there, ever…is Cashflow.
This means that you’ll be getting a consistent amount of money returning to your pocket, each and every month, as your tenants pay you rent.
Third, lets talk about another HUGE benefit of real estate investing…and one of the topics I also dread the most…TAXES
Thankfully, real estate has some AMAZING tax benefits that often means you won’t be paying any taxes at all on the money you make…here’s what I mean:
First of all, basically EVERYTHING in real estate is a write off against your rental income…
For example, you can write off your mortgage interest as an expense…meaning that’s a tax write off.
The property taxes you pay…that’s also a tax write off.
Your cost to insure the property…that’s also a tax write off.
Any costs you spend repairing the property…that can also be a tax write off.
In addition to that, you also have what’s called: DEPRECIATION
This is a tax-loss strategy where you can depreciate the cost of the property over 27.5 years against your rental income…because, according to the IRS, the property is seen to be “losing value” over time as it ages and deteriorates, and you need to be compensated for that.
Now speaking of depreciation….lets flip it around, and talk about another MAJOR reason I invest in real estate…APPRECIATION.
Over the long term, your property should go up in value as demand increases, and as inflation causes everything around us to rise in price…including your property…and this means that, one day, it’ll be worth MORE than you bought it for.
Now speaking of all this money and property value talk...and not paying taxes legally talk….that brings us to one of my FAVORITE reasons to invest in real estate…and that would be the almighty CASH OUT REFINANCE.
It’s like saying “I have $100 worth of profit I want to use but it’s locked up, and I don’t want to unlock it otherwise I’ll pay taxes. So instead, I’ll borrow $100 from a bank, who then holds on to MY $100 in the event I don’t repay them…now I have $100 to spend, and I’m never taxed on that money.
Then, once you get that new mortgage…the same rules as above apply. The interest is a write off against your income, and it allows you to leverage that money to make even MORE money…viola! Real estate for the win!
This really only scratches the surface of how people make money doing this…other advantages include being able to buy a property below what it’s worth, being able to fix it up to increase its value and cashflow, not to mention the almighty 1031 exchange that allows to you defer taxes anytime you sell real estate to buy a similar property.
It’s really because of everything I just mentioned which is why I’ve put so much focus on real estate investing over the last almost 8 years!
Now one of the first, and main reasons I’ve chosen to invest in real estate is a very simple one, but also something not enough people fully appreciate: LEVERAGE.
This is the practice in which you borrow CHEAP money…that then goes and makes you MORE money somewhere else. That allows you to profit the difference between what you pay in interest, and what that money makes you.
Now secondly, another HUGELY important reason I invest in real estate…as well as pretty much everyone else out there, ever…is Cashflow.
This means that you’ll be getting a consistent amount of money returning to your pocket, each and every month, as your tenants pay you rent.
Third, lets talk about another HUGE benefit of real estate investing…and one of the topics I also dread the most…TAXES
Thankfully, real estate has some AMAZING tax benefits that often means you won’t be paying any taxes at all on the money you make…here’s what I mean:
First of all, basically EVERYTHING in real estate is a write off against your rental income…
For example, you can write off your mortgage interest as an expense…meaning that’s a tax write off.
The property taxes you pay…that’s also a tax write off.
Your cost to insure the property…that’s also a tax write off.
Any costs you spend repairing the property…that can also be a tax write off.
In addition to that, you also have what’s called: DEPRECIATION
This is a tax-loss strategy where you can depreciate the cost of the property over 27.5 years against your rental income…because, according to the IRS, the property is seen to be “losing value” over time as it ages and deteriorates, and you need to be compensated for that.
Now speaking of depreciation….lets flip it around, and talk about another MAJOR reason I invest in real estate…APPRECIATION.
Over the long term, your property should go up in value as demand increases, and as inflation causes everything around us to rise in price…including your property…and this means that, one day, it’ll be worth MORE than you bought it for.
Now speaking of all this money and property value talk...and not paying taxes legally talk….that brings us to one of my FAVORITE reasons to invest in real estate…and that would be the almighty CASH OUT REFINANCE.
It’s like saying “I have $100 worth of profit I want to use but it’s locked up, and I don’t want to unlock it otherwise I’ll pay taxes. So instead, I’ll borrow $100 from a bank, who then holds on to MY $100 in the event I don’t repay them…now I have $100 to spend, and I’m never taxed on that money.
Then, once you get that new mortgage…the same rules as above apply. The interest is a write off against your income, and it allows you to leverage that money to make even MORE money…viola! Real estate for the win!
This really only scratches the surface of how people make money doing this…other advantages include being able to buy a property below what it’s worth, being able to fix it up to increase its value and cashflow, not to mention the almighty 1031 exchange that allows to you defer taxes anytime you sell real estate to buy a similar property.
It’s really because of everything I just mentioned which is why I’ve put so much focus on real estate investing over the last almost 8 years!
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