If you have experienced the economic and real estate crisis a decade ago, then this article may impact you. But the truth is that today, the market is recovered and, even if you are a beginner, you can build wealth through real estate.
When you make an investment, in most cases you have personal expectations that don’t differ that much from gambling. You are waiting for an asset to appreciate, or for a business to improve or grow. But if your presumptions are not based on real data and statistics you’re just throwing away your money and wishing to have good luck.
Real estate will provide you an opportunity of investment that’s safe and conscious. If you buy a property that you know it’s going to generate more income than it costs owning, after paying all the expenses and collecting rent, you’ll be left with positive cash flow. Taxes, insurance, mortgage loan, maintenance costs and fees, everything will be covered with the rent that you’ll get from the tenant and you’ll start to see profits as soon as you begin.
Stop investing in assets which you’ll be waiting to increase its value. Go with the option that’s safer: a property for renting. If you’re lucky and the future real estate market is benevolent, you’ll also have the option to resell and make an extra difference.
Appreciation and tax benefits
As we have said before, you can always resell. And we have said “if you’re lucky” but the real thing is that everyone has been lucky in this aspect. Real estate will always appreciate in the long-term. Even when prices do fluctuate, in the end, the result will always be higher than when you’ve purchased the property. So it’s always a matter of waiting for the right moment.
On top of appreciation, you’ll also access some tax benefits. You should consult a tax advisor, but we can tell you you can deduct 1/27.5 of your property value against the income you’ve got with the rental. This is because the government considers a property weathering.
In the end, you’ll be investing in a property that will generate a constant income and positive cash flow, will for sure see an appreciation in the long-term and will also protect your income against taxes. What could be better?
Really good financing options
When investing in any kind of business, we can guarantee you will never get terms of financing as good as when you invest in real estate. If you get a mortgage loan, you’ll have interest rates that are currently below 5% and down payments that for a citizen can be less than 20% and for a foreign around 30%. Your mortgage loan will be amortized in a period of 30 years. There are no such conditions for another kind of loan, for any other type of investment.
If you buy with a mortgage loan, you can go into a cycle: Buy, Rent, Refinance and Buy another property. When you refinance you’re getting the possibility of recovering your capital to invest in something else. The only thing you have to make sure is that your properties are producing more income than costs. Your cash flow should stay always positive.
Now that we have gone over its benefits, you are ready to build wealth through real estate. What are you waiting for?