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If you are looking to become an entrepreneur, going into the real estate business is one of the most guaranteed ways to ensure your money will give you good returns. However, before putting any money into a real estate investment be sure to read all you can, take classes from experts, like Than Merrill’s real estate class, and talk to real estate agents in the area you plan to invest.
The safest and most preferable option for real estate investing is rental properties. Below are some of the reasons why rental property is a great investment venture:
1. You will be getting money while expending little to no effort
Rental properties require little effort to manage. With a good property manager, you will never need to be physically available to manage your investment.
You could, for instance, be living in Florida, and still invest in Stowe realty in Vermont, and every month, your income will flow into your account regularly.
2. Good monthly cash flow
As long as you own property that you are renting out, you will be assured of a certain level of financial security throughout your life.
In fact, as rent goes up over time, the amount of money you receive monthly will increase. What’s more, if you bought your rentals using a mortgage, the more you continue paying your mortgage, the more money is due to you monthly.
3. Tax advantages
Tax authorities allow rental owners to depreciate the value of rental properties. Each year, at least 4% of the value of your home is subtracted from your taxable income.
More so, if you sell your rental, you are allowed to subtract expenses on the rental property and this allows you to pay lesser taxes on the profits.
You should consult with your attorneys regarding this issue to ensure that you take advantage of tax benefits and still remain within the law.
4. You will get access to more loans
Your rental property increases your equity. This, and the fact that your cash flow is good every month, make you an eligible candidate for more loans.
If you put money down when asking for a loan and you are already armed with equity and good cash flow, this compounds the benefits even further and you can access enough loans to buy multiple properties.
5. Appreciation of property values
Though your main goal when investing in a rental is to get rental income, you could still decide to sell your property in the future and make a lot of money from the sale.
6. Your property pays for itself
If you have priced your rent correctly, your rental income will pay for your mortgage. The good thing about this is that as your mortgage decreases, your equity will increase, all without having to go back into your pocket.
7. You can branch into large scale projects
The money you get from your real estate investment and the equity you build by owning so much property can catapult you into large scale real estate ventures.
You could start with one home and in a few years find yourself owning countless high value properties.
Based on the above benefits, there is no reason why you should hold back from becoming a real estate entrepreneur. It is an effortless, low risk and high return venture.
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