Continuing stock market volatility has never made real estate investments look so appealing. DeLand realtors are seeing an uptick in first-time real estate investors who realize diversifying assets and putting savings into property is a smart way to guarantee a beneficial ROI.
Real Estate Investments: Real Land, Real Value, Real Equity
If you pay attention to those with any amount of wealth, we guarantee you’ll learn they’ve invested in real estate in one form or another. According to Barron’s:
“…the real estate consultancy found that four in 10 ultra-high-net-worth individuals—those with a net worth of more than US$30 million—grew their wealth during 2022, ‘despite a year of permacrisis.’ And nearly half of the respondents named real estate as their top investment opportunity.”
Top 3 Reasons To Invest in Real Estate
That said, getting the ROI you expect means working with experienced Realtors who can help build your portfolio based on your investment goals and the area’s market trends.
Here are three key reasons investing in real estate is always beneficial.
1. Steady income flow through rent/lease funds
Whether you decide to invest in commercial or residential real estate (and why not both?), many investors use the investment to acquire equity while simultaneously benefiting from a steady flow of cash via tenant rent payments.
In this case, beginners may want to work with property management companies that carefully screen tenants. With the right tenants in a space, owners get a monthly cash flow that can be used for subsidizing their household income, paying for a child’s college tuition, or boosting retirement portfolios.
Rent in our area never seems to go down. According to the Apartment List National Rent Report, rents in key cities in Florida have gone up over the past six and 12 months. So even if rental prices flat-line for a period of time down the road, you’ll still be able to find properties that will rent cash positive.
2. Diversification: A foundation of long-term investment strategies
Our grandmothers advised us not to put all of our eggs in one basket. Real estate investors translate this as “diversify your assets.” Investment bankers want your money, so they’ll focus on asset diversification within their firm (stocks, bonds, cash, etc.). However, moving investments outside of the banking world, through real estate, adds another layer of investment security.
Like stock market investments, most real estate investments are viewed through a long-distance lens. You’re buying something now, resting assured that despite fluctuations in the market, you’ll gain equity over the course of 10, 20, or 30 years. In the meantime, you also reap the benefits of the continuous income stream mentioned above.
Once you have a certain level of financial security, you can play with a short-term real estate investment strategy: flipping houses. With that model, investors take a gamble by purchasing a fixer-upper at below market rate, remodeling to make it sellable, and then reaping a quick (and often substantial) ROI when they sell it at market value. However, this is more of a gamble because a market downturn may diminish your ability to make a profit or the profit you initially forecasted.
3. Tax benefits
There are several tax advantages to owning investment properties. The first is that, like homeowners, you can deduct the mortgage interest and property taxes. However, investors have even more tax deduction opportunities than homeowners, including:
- Property management fees
- Maintenance costs
- Property insurance
- Marketing expenses when advertising for new renters or tenants
Also, if and when you sell the property, the ROI is listed as a capital gain – rather than traditional income. Capital gains are taxed at a lower rate. Your agent can also help you locate “opportunity zones” in the Volusia County area, which means investors pay even less in capital gains if/when they sell the property.
Southern Exclusive Realty Helps Investors Find Ideal Properties
Are you interested in reaping the many benefits of investment properties? Then, schedule an appointment with us here at Southern Exclusive Realty. We’ll help you find just the right property to start to develop – or continue building – your real estate investment.
