With real estate becoming an attractive asset for numerous reasons like low mortgage rates, along with the incredible opportunities and deals you see in the news lately, you might be wondering whether real estate investment is right for you. If you’re interested in adding a Houston property to your portfolio, you might want to seek out a local realtor in Houston. Their broader investment management perspective will allow you to recognize both the benefits and drawbacks of adding real estate to your portfolio.
Real estate investing can be the best way to earn a passive income, save for retirement and build a diversified investment portfolio. However, ownership takes not only money, but also your time, energy and effort. Acquiring well-chosen Houston property can be a good idea, but first let’s take a look at why real estate should be in your portfolio before you get caught up with searching for the perfect investment property.
- A long-term real estate investing strategy is an effective hedge against inflation.
Real estate is a unique asset that has the ability to increase at a rate similar to the rate of inflation and earn income through rental payments. For this reason, investors put their money in real estate to protect their investment from period of inflation.
- Real estate properties generally appreciate at least 4% annually.
Well-chosen properties not only tend to keep pace with inflation, they also hold and increase their value overtime. So if you’re seeking high returns in the short-term, real estate investment may not be appropriate to add to your investment portfolio.
- Real estate investments over the long term offer tax advantages.
Property taxes are a major expense, but as a property owner you are eligible for tax deductions on your investment property, which generally include mortgage interest, property taxes, repairs, maintenance, and other related expenses that can be deducted from your gross rental income, thus minimizing the amount of tax you will pay. Tax benefits may differ from other investors, so be sure to consult your tax advisor.
- Real estate investing has the potential to generate long-term significant returns.
The fundamental benefit of investing is the potential to generate income. On the other hand, real estate investing allows you to earn a long-term passive income so you focus on your priorities. If the thought of maintaining an investment sounds difficult to your already busy schedule, then you can choose to hire property managers to help you make the investing process seamless.
- Diversification leads to investment risk reduction.
Simply put, diversification means not putting all your eggs in one basket. Adding real estate investment to your portfolio or allocating funds to various types of assets and securities can help reduce the overall risk of your investment portfolio, especially with our fluctuating economic cycle
Real estate investing could be your ticket to gaining long-term financial stability. And if you’re considering real estate investments, do the proper search to help you make a careful decision. Remember, a hasty purchase can cause long-term consequences, so talk to your Houston property managers for some investment advice.
If you are in the market to purchase real estate in the greater Houston region, we would love to earn your business.