If you want to achieve the life of your dreams, you will need a mechanism to do so. It doesn’t matter if your dream is having luxuries beyond your wildest imagination or helping out family members or the local charity of your choice. You need the money and assets to help you accomplish your dreams.
An interesting article from noted real estate investor and entrepreneur, Charissa Crawley confirmed my thesis. Ms. Crawley gives six reasons why you should be investing in real estate now. Here they are:
1. Passive Monthly Income – By investing now and using your head to perform some simple calculations, you can ensure that you have more money left over at the end of the month than you need. This positive cash flow is like a gift that keeps on giving because it will show up in your mailbox every month whether you’re there to meet it or not. $200-$300 per month may not seem like a lot of money. But when you have 5, 10, or even 20 checks like that coming in that you don’t require you to do some repetitive or backbreaking job, a seemingly inconsequential amount of money can suddenly look pretty good.
2. Security – A small child may rely on a blanket, a pacifier, or a thumb for a sense of security. Recent events have demonstrated that — while we may be older — we still like to feel confident that we have options during scary financial times. Owning real estate gives you that same feeling because you know that regardless of what happens you still have options that offer you financial security.
3. Depreciation – Thanks to the generosity of the U.S. Congress, real estate allows you to take an annual tax deduction for the loss in value of your real estate. Ironically, while you are busily taking a tax deduction for the lost value, the actual worth of your property may be going up. Recently real estate has taken a temporary hit in terms of value in many places in this country right. But you get the depreciation credit even when real estate values increase (which is most of the time).
4. Capital Gains – Whenever you purchase something and its value rises while you own it, the federal tax code requires you to pay a special tax on that item when you sell it. Fortunately, no tax is due until you sell it. While there are a couple of steps involved, you can also extend the time you have to pay that tax in the event that you do sell it, which is a major benefit to all those who are able to capitalize on this little quirk of the tax code.
5. Appreciation – Real estate appreciates – increases in value – far more frequently than it loses value. With these increases come the opportunities for you to add to your net worth. You’ll still have the monthly income your positive cash flow provides, and you also have a second way to cash in on real estate. A third way is if you bought it at a great price. You could look at the trickle of monthly income as a down payment on the flood of cash that will come your way through appreciation – value you can benefit from by selling the property or by pulling equity out to help fund future purchases or use for anything you like.
6. Pride of Ownership – Do you remember how proud you felt when you got your first car? It may have been a beat up Chevy, but it was yours. Imagine how your chest will swell with pride when you drive down the street or fly to a different city across the globe to look at your house. You realize that you own another just like it across the street, and several others that are even nicer just around the corner. There’s no better feeling in the world than knowing that you own something that so many others only dream about.
There are lots of great reasons why you should want to own real estate now. These are just a few of them. If you are smart, then you will begin to build a portfolio of appreciating assets that will add to your net worth on a year to year basis.