With well-chosen assets, investors may enjoy predictable cash flow, great returns, tax benefits, and diversification. Here you will learn some of the benefits of owning real estate and why real estate is in such high demand as an investment.
Cash flow is the net income received after the mortgage & all other expenses associated with the property are made. Cash flow is a key advantage of Real Estate investing. Oftentimes, cash flow increases over time as you pay down your mortgage balance. This also increases your equity. Atlanta real estate investors can take advantage of numerous tax breaks and deductions which could save money at tax time. Generally speaking, you can deduct some of the expenses of owning, operating and managing a home.
Real Estate investors earn money in 2 ways, rental income (short or long term) & appreciation. Real Estate values tend to grow over time and it is important to understand a property’s profitability up front, before you buy it. As the saying goes, profits on an investment property are made up front.
Our experienced Real Estate Professionals at Premier Property Management Services Atlanta can help you analyze properties of interest & determine the amount it could add to your net worth. All investment property will require that you pay some money down out of pocket. This money is instant equity. As you build equity, you can use the equity as leverage to purchase more properties, boost cash flow & increase your wealth.
Real Estate has a low and, in some instances, negative correlation with other significant asset classes. In other words, the inclusion of real property in your portfolio of diversified assets can lower portfolio volatility and provide a greater return per unit of risk.
The inflation hedging capability of property stems from the positive connection between GDP growth and the demand for property. As economies expand, the demand for property drives rents higher and property values higher. Therefore, real estate tends to preserve the purchasing power by passing some of the inflationary pressure in the kind of capital appreciation. If you would like to invest in property, but are not prepared to make the leap into Premier Property Management in Atlanta, you might want to consider getting your feet wet with a Real Estate Investment Trust (REIT).
The Bottom Line
Despite all the advantages of investing in real estate, there are drawbacks. Among the key ones is the lack of liquidity. It can take weeks or sometimes months to close on a property and convert it to cash. With a bond or stock, you can trade it and get your money within a few days. The conversion timeline can take this long regardless of if a licensed real estate broker is involved with the transaction or not.