Do you want to retire early? Build wealth? Or maybe you’re just looking for a more secure investment than the stock market. Whatever your financial goals may be, real estate can help you achieve them.
For millennia, real estate has been one of the most popular—and effective—investment vehicles available. In fact, according to Nihar Gala, “about 90% of millionaires in the United States have accumulated their wealth through real estate investing.” So, if you’re looking to get ahead financially, buying property is a good place to start.
How exactly does real estate help you achieve your financial goals?
Generates Income
One of the most common—and effective—ways to make money from real estate is to simply rent it out. When you own a property outright, you can generate a stable stream of income by charging other people to live there. And unlike stocks or bonds, which can fluctuate wildly in value, rental prices tend to rise slowly but steadily over time. This makes real estate an ideal investment for long-term wealth building.
In addition to generating income through traditional means like renting, there are also several other ways to make money from your property portfolio. For example, you could Airbnb your spare bedrooms or invest in a fixer-upper and sell it at a profit once the renovations are complete. No matter how you choose to generate income from your real estate investments, the important thing is that you are putting your property portfolio to work for you.
Builds Equity
Another way that real estate helps you achieve your financial goals is by building equity. Equity is the portion of your property’s value that belongs to you outright—i.e., what would be left over if you sold your property and paid off your mortgage in full. As your property increases in value over time (a process known as appreciation), so does your equity stake in it.
You can also increase your equity stake by making additional payments on your mortgage above and beyond what is required each month (a process known as paying down principal). By doing this, you will gradually reduce the amount of interest you owe on your loan while simultaneously increasing the portion of your home that belongs to you outright.
Offers Tax Benefits
In addition to generating income and building equity, real estate also offers a number of tax benefits that can help you achieve your financial goals. For example, the interest you pay on your mortgage is often tax-deductible. This deduction can save you a significant amount of money each year, which can be reinvested back into your property portfolio or used to meet other financial goals.
You may also be able to deduct other expenses related to owning and operating your rental properties, such as property taxes, insurance, and repairs. And when it comes time to sell your property, you may be eligible for a capital gains tax exclusion if you meet certain criteria.
In the end
No matter what your financial goals may be, real estate can help you achieve them. Whether you’re looking to generate income or build equity, investing in property is a great way to secure your financial future. So if you’re ready to start building wealth, real estate is a good place to start.
