Why Savvy Investors Prefer Investing in Real Estate Over Equities

  • It’s a long-term investment opportunity – the value of property continues to appreciate and the longer you hold on to it, the more it grows.

  • There are tax advantages –

    • Your investment property can be a rather reliable tax shelter because the tax code permits investors to reduce their taxes through deductions like yearly property taxes and interest paid on a mortgage.

    • In some cases the capital gains exemption would allow you to exempt up to $500,000 of the value in your home that has since appreciated from being affected by a capital gains tax liability.

  • Refinancing as a way to reduce tax liability – IRS tax code allows you to turn the equity in an investment property into cash and dodge a capital gains tax.

  • Real estate, particularly investment properties, offer you the benefit of bringing in passive income on a steady and predictable basis of cash flow while diversifying your investment portfolio.

  • Opportunities for building wealth while minimizing the amount you pay in taxes on that value

 

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Understanding the 1% rule for real estate investors