Real Estate…A Great Investment
Personal Control: When you invest in real estate, your decisions determine the amount of cash you receive. By tailoring your investment, operating and marketing strategy to current conditions, you can make money in any type of real estate market.
Equity Building: Over extended periods property appreciation of 3% to 5% can easily grow into hundreds of thousands of dollars.
Income Tax Benefits: You can shelter at least some of your rental income from state, local and federal income taxes. Section 1031 exchange laws allow you to sell one property and trade up to another property without paying income taxes on those profits (capital gains). Through refinancing or installment sales, you can even pull money out of your real estate with little or no payment of income taxes. Depreciation of commercial real estate asset reduces the income tax paid on income.
Leveraging: Unlike buying stocks, you can control the full value of the real estate with just the down payment. Not only can you buy rental property with much less cash than would be required to buy an equivalent amount of stock, but financing real estate is far easier and much less risky than using leverage to buy stock.
No Expert: You need perseverance, commitment, a willingness to learn and good knowledge of the local markets.
Real Estate is Illiquid: If your goal is to build wealth and financial independence illiquid in an advantage. It compels you to think things over before you act and it gives your property time to appreciate. To build wealth, you want to lock up your money.