I’ve really been pushing the cool-aid lately, haven’t I? I guess I have been, but I’ve found myself really tired of hearing all the negative news recently and thought I should “say” something that was positive (and honest).
Real Estate has historically been viewed as a smart investment decision. So much so, many people have identified owning property as part of the “American Dream“. And why not? Who doesn’t want to be their own little version of The Donald? Well, maybe less The Donald’s hair.
Here are my 3 reasons why investing in real estate is still smart:
That’s a fancy way of saying debt. And obviously, debt isn’t always a good thing. Especially if you owe more than you are capable of paying back. However, Real Estate is the only investment vehicle I know of that you can actually borrow most of the money to purchase it. I know for a fact you can’t borrow $135,000 with only $5,000 down to do some day trading on eTrade! When used with caution, Leverage is foundational to building wealth over time.
2) Tax Benefits
No one likes paying taxes. But owning real estate offers many tax benefits you just can’t find anywhere else. The biggest is the ability to deduct the interest you pay on your mortgage from your taxes. That’s right, not only can you use leverage to buy a house, you can deduct the cost of that from your taxes. Amazing!
3) Appreciation & Inflation
Now, obviously, no one’s home has appreciated over the past 3 years! But historically Real Estate has always appreciated with inflation and then some. Basically what this means is real estate is a “safe bet” for your money. When inflation rises that dollar bill in your left pocket can buy less, but your home’s value has gone up. This isn’t some magic rule though, so I can’t say it always will. But I can say it almost always has over time.
OK, that’s it folks. This doesn’t even touch on why buying a second home or investment property is a good idea! But, I guess I’ll get to that later!
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