These days there are countless things you can invest your money in, but we are going to focus on why investing in residential real estate might just be one of the best things you can put your money into.
People will always need a place to live. Whether they are buying or renting, fortunately, residential real estate provides either option and will surely put the roof over their head they are looking for. If you are choosing to invest in a rental property, this allows you the flexibility of raising rents or changing lease terms to reflect the current market conditions. So, while holding onto rental properties as investments can require more maintenance and attention, they can also provide excellent, continuous cash flow.
Opportunities are everywhere! Quite literally, they are available anywhere, meaning you are not confined to buying rental properties where you live. While it is more convenient to execute deals and maintain a property if you’re renting to tenants when you’re in close proximity, there are property managers who can help! Do your research and find what housing markets are performing well and purchase your property there, even if it's not next door. This also allows for you to continuously expand your portfolio, so the sky's the limit!
When purchasing a property you will also find that financing is much easier than with other real estate investments, such as commercial real estate. There are a variety of different loan options when it comes to residential real estate investment properties. Many lenders can provide loans that are very specific should you require something less conventional.
Did you know there are potential tax benefits associated with residential real estate investments? While it is dependent on the individual and their particular situation, investing in residential real estate can offer certain tax benefits. You can file deductions for things like property devaluation and mortgage interest, as well as defer your capital gains.
Make sure you take possible disadvantages into account! Although holding onto a rental property can create some serious cash flow, it is good to consider the things that could pose challenges. When you’re renting to tenants, you’re responsible for insurance, maintenance and repairs. So, if the HVAC unit blows out, that's unfortunately on you. You also have to consider that tenants may not treat your property as if it’s their own. They also might completely stop paying rent. These are worst case scenarios, however, it is important to keep them in the back of your mind when you’re putting your money into these properties. In most cases, the advantages of investing into a residential property outweighs the potential issues associated with owning a home.
As you can now see, there are significant benefits involved when it comes to investing in residential real estate. Allow one of the seasoned lenders at CALCAP Lending to provide you with a hassle-free loan process on your next residential real estate investment!