A large number of investment options are available for people who are looking for a place to invest their savings. One of these choices is to start real estate investment. This is a very useful investment option and if you decide to make money in real estate investment you will enjoy a very good return on your investment, more than most other investment options.
Real estate investment has great potential to provide large returns. You can borrow money from the bank to finance your real estate investment. Most banks are willing to finance 90% of the cost, so you can make transactions with a down payment of 10%. This gives you a refund of 10 times for your investment. Let’s take an example – if you have $ 10,000 to invest and assume you get a 10% refund regardless of the investment vehicle you are using. If you invest in the stock market to buy shares worth $ 10,000 then at the end of 12 months, your investment is worth $ 11,000. Instead, if you invest the same money into real estate with a bank loan 90%, you get 10% at a total investment of $ 100,000 and you will receive $ 110,000.
As you can see from the example, your $ 10,000 has doubled using real estate investment, while it can only produce an additional $ 1,000 in the stock market. You can understand this reason – your lenders also work for you. It is the power of leverage and is one of the biggest advantages in investing in real estate. As you will see, there are many more advantages to making money in real estate investment.
The tax date because property depreciation is an important reason for becoming real estate investors, earliest. While in fact the property value appreciates its value, because of increasing value of land, you can claim the reduction in taxes for some nosional tax losses, or in other words your taxable income is significantly lower than your real income. Very nice!
Great tax benefits are an exchange of 1031. This exchange is defined by the IRS code. This exchange allows investors to delay the tax payment of Capital Gain if the increase is then reinvested in other properties that meet code guidelines. The government wants people to live in the real estate market and strengthen this with this tax benefit.
One final benefit of the beginning of real estate investment is worth mentioning here is the flexibility of sales contracts. Unlike your stock market can be very creative with your offer.