There are several different types of investing, but real estate investing has been growing in popularity among younger investors in recent years. The reason behind this growth is that investing in real estate provides many advantages over investing in stocks or other forms of investing. Here is just a short list of some of those benefits.
When trading stocks, the IRS is very strict in terms of the taxes and penalties they apply. You can end up owing more to the government than you planned to invest if you sell a stock at the wrong time. However, there are plenty of tax breaks that apply to real estate, which will help you save on your annual taxes. Whether you own residential or commercial real estate, a good tax attorney can help you save on the amount you’ll owe to the government.
Earn Passive Income
Your rental properties serve as an investment that you will always be able to utilize, which means they can be used as retirement tools. Additionally, you’ll earn passive income each month through rental payments from your tenants. Your first obligation will be to make loan payments, save for property taxes, and cover upkeep costs. After those expenses are paid, the rest of that money can go into your pocket.
Survive an Economic Downturn
As your area experiences inflation, a recession, or even a depression, your dollar will be stretched further. The prices on everything will go up and your stocks will do little to help you in that situation. In fact, stock prices will drop, so it wouldn’t even be feasible to sell your shares. On the other hand, you can increase the rent on the real estate properties you own. As long as you keep them comparable to other units in the same market, you can increase rental rates to help you survive economic downturns.
If you’re new to investing and you’re not sure about risking all of your savings, there are other options available. The digital age has brought about crowdfunding and other options that allow you to only invest what you can afford. As you see your wealth begin to grow, you make larger investments that will allow you to experience the full advantages of real estate investing.