Real estate has long been a sound way to invest your money, allowing it to grow over time as the asset appreciates in value. And these days, it looks like Americans are increasingly turning to real estate as a source of investing.
According to a recent Gallup poll, real estate maintained its position as the preferred long-term investment among Americans for the 8th year in a row. More specifically, 41% of the people surveyed said that real estate was their preference when it comes to investing. That’s the highest rating in the history of the survey.
Compare that number to other investment vehicles included in the survey, such as the following:
Stocks/mutual funds – 26%
Gold – 18%
Savings accounts/CDs – 9%
Bonds – 3%
Real estate has been steadily gaining ground over the past 11 years. And it’s easy to see why.
Appreciation in Value
Real estate investors make money in a few ways, one of which is through appreciation. Over time, real estate tends to increase in value. Without having to do much besides pay the mortgage, all you need to do is allow the property to sit there and appreciate in value, allowing you to grow equity in the property over time. And when it comes time to sell, you can realize a hefty profit.
A rental property that collects rent every month can provide you with a steady stream of cash flow every month. As long as you’ve crunched the numbers and generate a positive cash flow after all expenses have been accounted for, you can earn yourself a decent stream of income.
There are certain tax breaks that come with owning real estate. As a real estate investor, you can benefit from several tax deductions that can help save you money when you file your taxes. Generally speaking, you can deduct certain costs of owning, operating, and managing a piece of real estate.
Hedge Against Inflation
Owning real estate can help you hedge against inflation. The demand for real estate can fuel higher rents as the economy expands. In turn, this can translate into higher capital values.
As such, real estate can help you maintain your buying power by allowing your tenants to assume some of the inflationary burden through rent payments.
With as little as a 5% down payment, you can own an asset of great value. The leverage available in the form of a mortgage makes owning a valuable asset like real estate attainable for the average investor.
Diversify Your Investment Portfolio
It’s always a good idea to avoid putting all your eggs in one basket when investing. Instead, you would be wise to diversify your investment portfolio to help maximize your returns while minimizing your risk. And real estate should certainly be a part of your diversified investment portfolio.
Let’s connect if you’re ready to make real estate your best investment this year.
Do you have questions about home loans? Are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.
No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.