Why you should invest in real estate? Well investing in real estate for profit is one of the most popular approaches to earn additional income in the United States today. In fact if you pay attention to the latest news you saw numerous reports of craze investment real estate seems to be sweeping the nation.
When done, carefully and rationally, real estate can bring fantastic benefits that cannot be achieved through any other type of investment. Here are some examples of why real estate investing can be a powerful generator of wealth.
1. real estate markets are slow to REACT, while real estate, like everything else, the ups and downs, it's usually a lot slower to react than the stock market. For example, you won't get up in the morning and find that your investment in real estate is worth ten or twenty percent less than yesterday.
2. leverage. You can borrow money to buy real estate, while generally not borrow money to buy stocks. You can control important dollar real estate with a small amount of their own money through loans and mortgages. In the stock market, the law limits the amount of leverage (margin) can be used to buy stocks. There are no such restrictions.
3. you can buy a property less than its market value. In many cases you can purchase the property for as low as 60-70% of market value. When buying shares, you'll find a stock that is considered "below cost" but overall, it's tough to do it on a regular and consistent basis.
4. real estate offers a huge number of tax advantages through depreciation. Real estate generally has two meanings, land and buildings on Earth. For example if the property is valued at $ 250000 and the assessed value of land is worth $ 75000, $ 175000 to the building.
The Government allows real estate investors to amortize the cost of buildings in equal shares for his "useful life", which is defined as 27.5. So, for example based on $ 175000 build a value above the annual amount of depreciation would be $ 6.363.63 ($ 175000 divided by 27.5). This means that for the purposes of taxation, investor will be able to reduce its annual income of $ 6.363.63!
Many people find the concept of depreciation to be misleading, since it really isn't a waste of money. I recommend you check with a qualified professional for more information and how it can benefit you.
5. isolated real estate markets of local markets. For example, when the stock market crashes, he takes down almost anything and everything related to it. When in the same city, such as New York falling home values, usually it does not affect the values of properties in other cities like Boston or Chicago. To protect yourself, you can have "a geographically diversified portfolio of investments in real estate" to hedge these types of events.
6. you can control the value Investor. Another aspect of real estate investments is that unlike any other investments buck is controlled by an investor. For example as an investor, you can increase the value of your investment property by making some changes to the properties, such as adding or replacing carpets garage etc. Stocks or any other investment, the investor can not do anything to increase the value of investments.
7. the efficient market hypothesis (EMH). When the market price, which is always "fully reflect" available information, it's called "effective". In the stock market for example is considered by most efficient market. When you call your broker to buy or sell a stock, you can be sure of one thing-the price you buy or sell shares to really was "correct" price for the shares in this day and time. Why? Since the current share price is already will involve and reflect all relevant available information about the company such as income and other indicators.
Real estate market is very inefficient. Unlike the stock market, real estate transactions a mechanism to detect "correct" price is left to the discretion of each buyer and seller to determine their own. There are almost always uncertainty about whether the price, the seller is too high or too low. In addition, there is usually little no available from analysts and research institutions (as when working with shares) in this regard. This inefficiency is really why such a great investment opportunity be smart and win real estate! But it requires experience and a sharp eye for good deals and great skill. This experience can be developed.
If done correctly, the real estate is probably one of the smartest investment you could ever make. I hope this short rambling provided you with a fresh view of the many benefits of real estate investing. So be smart, continue to learn and especially not to wait for some magical moment, just get started.
To your success!
Rick Foote
Rick Foote is the President & CEO of Dorian group, Inc. Dorian is a software company that develops software applications designed to help beginners get off at realistic and practical beginning as of real estate investors. To learn more about Dorian's products and services http://www.reiscouts.com visit
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