The Advantages and the disadvantages that come with real estate investment
Real estate investment is a kind of strategy that investors make use of whereby they purchase property for them to be able to earn a considerable amount of profit from it. Most of the time, the investor is either going to decide to rent out the real estate investment Fort Lauderdale called Real Pro property or they are going to take the time and improve it so that they can be able to sell it out at a much higher cost than what they initially bought it for. however, even though real estate investment is a very valuable market, you still need to keep in mind that it has been found to be way riskier compared to any other kind since as you may already know, theproperty does not usually get sold quickly like other things.
So what are the advantages?
- You will have security
When you own your very own property, this is, in turn, going to give you as an investor the right amount of security since the value since the value of your property will not end up fluctuating compared to other assets that are in the market like bonds and stocks. However, even though this is the case, it does not really mean that an investor may not end up breaking even or more still making a profit out of the investment that they may have made. An important point to keep in mind is that even though the housing prices may tend to either increase or even decrease in their value, there is still that value that right here on Real Pro they are always going to hold even with the fluctuation that may be taking place.
- There is an income stream
If the property that you have invested in is easily turned into rental units, you will find that as an owner, you are going to have a steady income at all times especially since it is going to be coming in as rent. Depending on the exact location of your property, then you will end up getting a significant amount of income on a monthly basis.
Self-occupation is another reason as to why many investors tend to opt for real estates. What this means is that the investors themselves can still be able to properly utilize the property. They can either choose to live in the property as they are fixing it up or they may choose to live in as a landlord and at the same time get to earn the monthly income that is going to be coming with it.
- It is a kind of tax shelter
The tax laws that tend to govern income properties may vary greatly depending on the area of jurisdiction one is in, it is still important for you to make sure that you are able to do the right kind of research before you start investing. In most cases, you will find that the taxes that are on your gains may end up been deferred until when you are going to be able to sell your property.
What are the disadvantages?
- The maintenance costs
The cost that is needed for an investor to be able to maintain the property may cause them to end up losing a good amount of money. For example, if the owner has a number of units under their name, then they may end up making use of huge amounts of money to foot the bill. Since they are also at risk of renting out the property to someone who may not take good care of it, the investor may end up spending more.
- There are legal difficulties
It may be very confusing for you especially if you are investing in real estate for the very first time. Another thing is that you will need to be aware of all the laws that are governing the jurisdiction that you are in and if you have no idea about them, then your investment may end up being a risky affair. The legal difficulties may at times become too much for you.
- The taxes on the property
For you go ahead and invest, FIABCI you should always go ahead and factor in the property taxes that will be needed and made use of during the valuation process of the property.