While now is a questionable time to be selling and buying a new home, it is a good time to be putting your spare cash into real estate, particularly homes that are suitable for the rental market. There are even small groups, either family members or close friends, who are pooling their spare cash to become real estate owners. Why is now a good time? There are a lot of reasons, and those who do take the plunge are finding instant success.
So what are the benefits of investing in real estate?
Very high demand in the rental market. In some areas, mortgages (if you can get one) are cheaper than rents. The demand is so high that some rental agencies are letting homes within hours of them becoming available ? there are very few empty rental homes in the country at present.
Tax benefits. If the home loses value and you sell, you may be able to claim a loss. You can offset rental income through interest paid on a mortgage, taxes, insurances and repairs. If you have a partnership of two, three or four people, rental provides are divided up and the effect is much less on personal taxation. However, do remember that rental income is taxable.
Building a retirement. One of the real benefits of investing in real estate in the rental market is that it is (or should be) a long term investment. Home prices will turn around and appreciate in value eventually. While an increase in value is a capital gain and taxable, if you paid off most or all of the mortgage, it becomes a handy asset to own in retirement.
Rentals can offset most of the mortgage. If your deposit is large enough, then your rental income may pay off all of the mortgage for you. If not, it will still pay a major portion of that mortgage.
Build into a portfolio. Once you have your first investment property, you will be surprised at how easy it is to build a portfolio of rental properties. The more properties you have, and the more equity you have, the more lenders love you and welcome you back.
With low home prices, low interest rates, and a very high demand for properties for rent, now is a good time to invest, but only if you have the spare cash to cover a mortgage when the home is empty.
Related posts:
- The Moderate Income Mortgage Squeeze
- Home Buying Assistance In Virginia For Low Income Earners
- Is Now The Time To Buy Cheap Real Estate For Rentals?
- Investing in Real Estate: Financing Creativity
- Washington DC Real Estate ? Sell Or Rent?
Source: http://www.realestatebriefings.com/investing/spareincome-realestateinvestor/
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