by Mark Goldberg
Many Reasons for Investing in Real Estate
There are many reasons why investing in real estate over other investment avenues is a safer and more profitable route to take and we will go over just a few of these factors with you in this article.
Growing Instead of Shrinking
First thing to note in the list of real estate investing benefits is that if you look at the real estate market as a timeline compared to the stock market, you will notice that real estate has a growth line with few major fluxuations. On the other hand, the stock market has high points and valleys that range from quick highs to sudden drops throughout its history. It is harder to look at the timelines of other forms of investing, i.e. currency investing, mutual funds, buying gold and silver, etc, but one thing is clear: no other market is as profitable or as safe as the investment real estate market.
Many people ask me, "Why is investing in real estate such a safe investment?" The answer is as simple as it is complicated. The quick answer is, "God isn’t making any more of it." The more complicated answer isn't as poetic. The reason investing in real estate has so many benefits is based on many factors. I will go over the basics with you now:
1. Government Tax Breaks:
The United States government has setup multiple tax breaks for real estate investors including the very popular 1031 exchange. The textbook definition of a 1031 exchange is:
"A 1031 exchange or Like kind exchange is defined by section 1031 of the Internal Revenue Code. This code specifies that if an asset, usually some form of real estate such as land or a building, is sold and the proceeds of the sale are then reinvested in a like kind of an asset then no gain or loss is recognized, allowing the deferment of capital gains taxes."
The simple explanation is that as long as you reinvest the money you made from your real estate investment into another investment, you don't have to pay taxes on said profit. No other form of investing gives you this much freedom with taxes.
2. Anyone Can Invest:
Because real estate investing is so profitable and safe, it sees a huge amount of amateur investors entering the market everyday. Why else do you think all these infomercials are on late at night talking about the millions they've made overnight with someone's CD set? O.k. I'm not saying that buying one of those CD sets will make you a millionaire, but they are good to learn the basics of real estate investing. The big problem with these CD sets is that they teach making millions in real estate with bad credit or without spending a dime. This is not the case. 99.9999% of the time you will need excellent credit and a good amount of money for the down payment on an investment property (usually 10%-20%).
3. Other People's Money:
Why invest your money when you can invest someone else's? One of the big rules in real estate investing is: "If someone is willing to flip the bill - let them." Banks are more than willing to give out a loan to buy houses because unlike other forms of investing, they have something tangible they can keep if you don't pay up. Banks are usually not as willing to give loans for stocks or gold investing because the stock you invested in may be worth nothing by the time you sell and the bank has nothing... OR you take your gold and run across the border. Real estate is almost always going to be worth something (often increasing in value every year) and their has not been a recorded case yet of someone taking a house across the border.
Right now the investment real estate market is booming like never before in history, and those investing in it are being rewarded more than in any other time. If you want more information on this explosive market, feel free to contact us and we will answer any questions you may have.
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