{"id":25785,"date":"2020-03-08T17:38:14","date_gmt":"2020-03-09T00:38:14","guid":{"rendered":"https:\/\/www.rowanfinancial.com\/?p=25785"},"modified":"2020-03-08T17:38:21","modified_gmt":"2020-03-09T00:38:21","slug":"5-great-reasons-to-invest-in-real-estate","status":"publish","type":"post","link":"https:\/\/www.rowanfinancial.com\/2020\/03\/5-great-reasons-to-invest-in-real-estate\/","title":{"rendered":"5 Great Reasons to Invest in Real Estate"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"alignright size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.rowanfinancial.com\/wp-content\/uploads\/2020\/03\/5-Great-Reasons-to-Invest-in-Real-Estate.jpg\" alt=\"5 Great Reasons to Invest in Real Estate\" class=\"wp-image-25787\" width=\"296\" height=\"197\" srcset=\"https:\/\/www.rowanfinancial.com\/wp-content\/uploads\/2020\/03\/5-Great-Reasons-to-Invest-in-Real-Estate.jpg 900w, https:\/\/www.rowanfinancial.com\/wp-content\/uploads\/2020\/03\/5-Great-Reasons-to-Invest-in-Real-Estate-300x200.jpg 300w, https:\/\/www.rowanfinancial.com\/wp-content\/uploads\/2020\/03\/5-Great-Reasons-to-Invest-in-Real-Estate-768x512.jpg 768w\" sizes=\"(max-width: 296px) 100vw, 296px\" \/><\/figure><\/div>\n\n\n\n<p>Real estate is a great investment for a variety of reasons, not only in financial terms, but also in the sense of satisfaction it can bring to you.\u00a0 Here is my take on the five best reasons to consider adding real estate to your investment portfolio.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Reason #1 \u2013 There\u2019s Only So Much to Go Around<\/strong><\/h4>\n\n\n\n<p>Real estate is a genuinely fixed commodity, perhaps with the small exception of <a href=\"https:\/\/www.worldatlas.com\/articles\/man-made-islands-in-dubai.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">man-made islands<\/a> being built off the coast of Dubai.\u00a0 As a result, since the 1970\u2019s, <a href=\"https:\/\/inflationdata.com\/articles\/inflation-adjusted-prices\/inflation-adjusted-housing-prices\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">real estate values have outpaced inflation<\/a>.\u00a0 And while it\u2019s true that bubbles have happened and real estate does sometimes fall dramatically in value, there are other financial reasons that real estate investments make sense.\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Reason #2 \u2013 Tax Advantages<\/strong><\/h4>\n\n\n\n<p>If you choose to own real estate within an entity such as an LLC, there are a whole host of expenses that can be deducted from any rents you collect.&nbsp; These include:<\/p>\n\n\n\n<ul><li>Property taxes<\/li><li>Property insurance.<\/li><li>Mortgage interest.<\/li><li>Property management fees.<\/li><li>Property repairs, capital improvements, or ongoing maintenance.<\/li><li>Advertising expenses (like the cost to list a rental or market a property for sale).<\/li><li>Legal and professional fees such as an accountant, attorney, or bookkeeper.<\/li><li>Business equipment such as a laptop, printer, office desk, or phone.<\/li><li>Office space, including a home office.<\/li><li>Communication such as internet, a PO box, or phone line used for business purposes.<\/li><li>Travel expenses including your vehicle mileage and parking fees.<\/li><li>Education and memberships such as the annual fee for a trade association or cost for a seminar, book, or course on a topic relating to your industry.<\/li><li>Meals (as long as the meal is with a prospective or current client or partner and business is discussed). <\/li><\/ul>\n\n\n\n<p>Another huge advantage of real estate is the ability to generate \u201c<a href=\"https:\/\/semiretiredmd.com\/positive-cashflow-loss-on-tax-returns\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">paper losses<\/a>\u201d by <a href=\"https:\/\/www.investopedia.com\/articles\/investing\/060815\/how-rental-property-depreciation-works.asp\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">depreciating<\/a> the property over the 27.5 year schedule allowed by the IRS.\u00a0 This tax treatment allows you to generate positive cash flow from rental real estate properties without being taxed on it.<\/p>\n\n\n\n<p>Finally, <a href=\"https:\/\/www.rowanfinancial.com\/2019\/12\/what-you-need-to-know-about-buying-real-estate-within-your-ira\/\">you can buy investment real estate within your self-directed IRA<\/a> through a custodian such as <a href=\"https:\/\/www.camaplan.com\/\">Camaplan<\/a> to defer all gains and taxes on a property out of higher income years to future, lower income years.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Reason #3 \u2013 Passive Income<\/strong><\/h4>\n\n\n\n<p>Real estate also allows you to generate <a href=\"https:\/\/www.investopedia.com\/terms\/p\/passiveincome.asp\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">passive income<\/a> in the form of rental income.\u00a0 Once you get your property up and running you can <a href=\"https:\/\/www.buildium.com\/blog\/how-to-hire-a-property-manager\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">find and hire an excellent property manager<\/a>, usually for somewhere between 8-12% of the rents you collect. \u00a0 This allows your rental properties to chug away making money in the background while you pursue active income streams that you are more passionate about.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Reason #4 \u2013 The Magic of the \u201cBefore and After\u201d<\/strong><strong>\t<\/strong><\/h4>\n\n\n\n<p>However, not all of real estate investing needs to be passive.\u00a0 If you love taking on house projects and seeing the magic of \u201c<a href=\"https:\/\/www.msn.com\/en-us\/money\/realestate\/before-and-after-americas-best-ever-fixer-uppers\/ss-AAFqznq#image=7\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">before and afters<\/a>\u201d either in your own home or by watching HGTV, you may absolutely love tackling a rehab that truly transforms a property. \u00a0 Plus, this is your opportunity to actually create value within the real estate you own and further increase the profits you can make.<\/p>\n\n\n\n<p>If you\u2019re unsure, start with a lower cost cosmetic rehab and, if you love it, move on to increasingly complex projects.\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>Reason #5 \u2013 Making an Impact<\/strong><\/h4>\n\n\n\n<p>Finally, one of the most compelling reasons to invest in real estate is the opportunity it presents to impact your neighborhood and the residents within it.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Through your efforts, you can transform a property from a community eyesore to a community asset. And, you can genuinely improve the lives of residents by providing much needed <a href=\"https:\/\/bungalow.com\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">safe, well-maintained and affordable housing<\/a>.\u00a0\u00a0<\/p>\n\n\n\n<p>Consider real estate as an investment not only to improve your personal bottom line but also to improve the lives of your tenants and the surrounding area<br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Real estate is a great investment for a variety of reasons, not only in financial terms, but also in the sense of satisfaction it can bring to you.\u00a0 Here is my take on the five best reasons to consider adding real estate to your investment portfolio. Reason #1 \u2013 There\u2019s Only So Much to Go&hellip;<\/p>\n","protected":false},"author":4,"featured_media":25787,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[177],"tags":[],"_links":{"self":[{"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/posts\/25785"}],"collection":[{"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/comments?post=25785"}],"version-history":[{"count":0,"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/posts\/25785\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/media\/25787"}],"wp:attachment":[{"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/media?parent=25785"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/categories?post=25785"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rowanfinancial.com\/wp-json\/wp\/v2\/tags?post=25785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}