Top 5 Benefits of building a Property Portfolio
- Posted By Shiral Alexander
Real estate investment is a great way to make money. It gives you the opportunity to invest in properties and hold onto them while they appreciate in value. But how much does it cost to start investing in real estate? And what are some of the benefits of being an entrepreneur in this field? Let's take a look at all these questions and more!
Tax Benefits
One of the biggest benefits of investing in real estate is that it's tax deductible.
You can deduct interest on your mortgage payments.
You can deduct depreciation of your property.
Cash Flow
Cash flow is the difference between income and expenses, or how much money you are making on your property. Cash flow is a good indicator of how well your property or property portfolio is doing because it shows that you have enough in the bank to pay yourself and other expenses.
You can use cash flow as an indicator of whether or not your company will be profitable, which means it could help make improvements to the way things work at home so that they are more efficient or effective. This will also help reduce any future expenses associated with running a successful real estate investment!
Appreciation
One of the most obvious benefits of investing in real estate is that you can expect to see appreciation. This means that the value of your property will go up over time, which means more money for you!
To calculate how much the property has appreciated, divide its original purchase price by its current selling price (this is called “appreciation rate”). An example would be if someone bought a house for $100k and sold it for $200k—the appreciation rate would be 100%.
Control / Choice
You can control the property.
You can choose the tenant.
You can control the value of your investment property.
Security
There are many reasons to start a real estate investment. One of the most important is security. As a landlord, you’re in control of your own destiny and can choose how much money to invest in your property and what kind of living space would suit you best. Real estate has been proven to be one of the safest investments out there.
Starting a real estate investment is a great way to earn passive income and build wealth over time. The benefits are unlimited and you can use any property as your own personal credit card.
* If you need help building your real estate portfolio, we previously talked about it and you may read them here.