With many Americans opting to rent over ownership in many metropolitan areas, the time to invest in real estate is never better. In fact, owning investment real estate offers many valuable benefits to the owners. Here are a few to consider before your first purchase.
The property tends to appreciate year over year. This appreciation is on the entire value of the asset rather than simply the amount of money you personally invested in it. You can leverage your money and watch your appreciation grow with each passing year. For more information on leveraging, contact a real estate investing service Arvada CO.
Many investors choose a standard 30-year mortgage to purchase a property. Like most loans, the majority of the interest is paid upfront. However, about halfway through the loan, you’re paying equally on principal and interest. Having tenants pay towards the principal and interest means more money in your pocket. You can sell or refinance the property to capitalize on the wealth held within it. Or continue to keep it once the mortgage is paid off and pocket the rent.
Buying real estate offers you a lot of control over which investment you own and how you rent the property. You can choose long-term or short-term tenants. Contracting with services such as VRBO or Airbnb allows you access to vacation rentals. Or you can manage the property yourself or with the help of a dedicated property manager. Real estate investments give you more control than traditional stock market investments.
Rental properties are a great way to create passive income for yourself. Whatever rental money you receive for the property is yours. If you owe money on a loan, whatever is leftover lines your pockets. If you own the property outright, you pocket the entire amount of rent. Over time, this passive income can help generate wealth for you and your family.