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Saturday, 6 January 2018

Why Real Estate Investment Should Be Part Of Your Portfolio

By Scott Gray


Are you looking towards retiring comfortably when the time comes? Do you want to quit your mundane job so you can work on more fulfilling endeavors? No matter what your reasons are for taking interest in entrepreneurship, real estate investment in Seattle WA can help you attain your financial goals sooner than you think.

As is the case with shares that yield dividends, properties can also provide a steady flow of cash. This will be much higher than what you would get from the former and, should you choose to outsource the management role, no input will be required from you whatsoever. As for what to do with the cash, it's all up to you to decide what makes the most sense for your bottom line.

The value appreciation of your investment property will be sheltered from the taxman until you cash out. More importantly, you'll only be required to pay taxed on 50% of the total profits made during the sale. Since there's no limit to how much one can shelter, this benefit compounds quickly when you invest in several properties, giving you more fuel to grow your portfolio.

When you invest in shares, the value of your assets is directly dependent on the actions of the people running that company. This introduces an element of uncertainty, since you can't really tell if they have your best interests at heart. In contrast, real estate investments are directly under your control. With good management of your portfolio, you can tangibly improve its value and build wealth, something that's virtually impossible with shares and bonds.

In most jurisdictions, real estate owners can take advantage of several tax deduction strategies. Besides the cost of operating one's property, one can also subtract mortgage interest and depreciation deductions from their taxable income. This makes the investment more profitable, but make sure you consult a tax expert before preparing your statements.

Although stocks and bonds can be bought using loans, such deals are always risky because there's no tangible asset to back up the debt. Investment mortgages, on the other hand, can be structured to offer lenders more security, which greatly boosts your borrowing power. This makes it possible to purchase more assets with less money and benefit from their growth, which is one of the most powerful tricks you could use as an investor.

In most markets, property tends to rise in value over time, but without the volatility commonly experienced in the share market. You can thus rest assured that your assets will be worth more than you paid for them in years to come. Additionally, income from real estate tends to cope better in inflationary periods, allowing you as the investor to maintain significant returns.

There's no doubt that the housing sector presents lots of opportunities for individuals seeking to grow financially. However, this will only happen if you understand the risks and rewards involved, as well as how to nurture your business as it matures. So make sure you approach other investors for advice before you set forth with purchasing your first piece of real estate.




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