Real estate investing has so many benefits that it’s difficult to contain them all in one article.
That’s why, as a carryover from the previous blog sharing the top five benefits of real estate investing, I want to share five easy means that you can experience as a real estate investor in 2019.
With the real estate market softening a little bit and mortgage rates rising, there are some pros and cons to this occurrence.
Raise Rental Rates
As interest rates increase for mortgages, cost of buying a home will increase for millennial’s who are seeking to purchase their first home. This means that the trend will likely rise towards property rental instead of home ownership.
Of course, this is a perfect scenario for real estate investors who own rental properties to see an increase in demand for their rental units.
Save on Housing Prices
If you are looking to snag up rental properties this year you can probably find properties at a cheaper price. Sometimes, rising interest rates decreases the value of homes because the more expensive the cost of money account the less home the average home buyer can afford.
This decreased demand for homes sometimes causes house prices to drop. There areas around the country where this is already happening.
If you have another way to purchase homes such as hard money loans, private investors, etc., you can really succeed in snatching up more properties at lower prices.
Stimulate Your Local Economy
Real estate investing and rehabbing properties revitalize neighborhood and provide a lot of jobs for local vendors. Real estate development is one of the very top economic indicators in the US because of all of the vendor services that it touches.
Think about what happens when you renovate just one property. You get supplies from the supply store. You have your roof renovated by the roofing company. You have your windows installed by a window company.
You have your carpets and hard floors installed by one or two different companies. You work with the general contractor to oversee the rehab project. You work with a lawn care company to make over your lawn for curb appeal. And you probably do even more than that.
Capitalize on the 1031 Exchange
When you reinvest the gains of one property directly into another property, section 1031 of the Internal Revenue Code allows you to put off paying taxes on the sale of their previous property.
This is seen as an exchange of one property for another property by the IRS. As long as the new property is in nature same kind of property as the old with in the new property is of equal or greater value, then it is fine to postpone paying taxes.
Another stipulation with this loophole is that you should find a new property within 45 days of selling the old property and included in the official documents. Then, you must close the deal in 180 day.
Provide Great Homes for Others
One of the points that we sometimes miss but is really the heart of the matter for the people that we serve as real estate investors is the part we play in providing safe, healthy, clean, and affordable housing for people who can’t otherwise afford the home at this time in your life.
We all deserve to have a safe place to call home. Most people face a time in your life when they are just starting out, they’re going to job changes, they got high debt that they’re trying to pay down or pay off, or some other valid reason why buying a home is not the right move.
You have that opportunity as a real estate investor to be one of the good guys who doesn’t overcharge tenants for substandard living environments.
You can provide homes and make people feel good to call it their home and that they can afford while also generating a healthy profit.
Recognizing how we can benefit humanity and doing our best to help others through the business activities that we engage in is important.
As you see there are so many benefits to investing in real estate particularly in these market conditions where mortgage rates are rising.
If you would like to take the next step towards becoming a real estate investor you should take the best next step by claiming the Real Estate Investor Starter Kit.
Or, if you are ready, you can do one better and schedule your Profitable Portfolio Strategy Session.
In this session we will meet with you one-on-one to find out your goals and discuss the best way to grow your real estate investment portfolio in the local Westminster, Maryland market fast.