Top Five Reasons to Invest Your Money in Real Estate
As the gloom of tax season draws closer, I am sure you would like to hear unique financial information. Investing in the property will give you the advantage of saving for your future but could aid in reducing your tax burden.
While it is a good idea to invest in tax-favored traditional financial instruments like the 401K or an IRA, real estate investing is now playing an increasing role in the success of a portfolio of investors. In the wake of the market crash in 2008, many investors hesitated to invest in this kind of investment because it is an unpredictable and volatile resource. However, in recent years, the reverse has proved to pass, and hundreds of everyday individuals have achieved financial freedom due to fixing and flipping retail investments.
YOU CAN OBTAIN A TAX-FREE CASH FLOW
If you’re considering investing in properties for improvement and later renting out to generate a steady cash flow, then you’re in the right place! Due to the deduction of mortgage interest and depreciation (should you use your capital to leverage), your cash flow from any investment in rental property will be non-taxed.
Most often, investors will not have to pay taxes on the cash flow they earn through rental homes. A further benefit is the capital gain you can receive if you decide to sell your fix-and-flip property soon.
YOU CAN USE TAX WRITE-OFFS AGAINST OTHER SOURCES OF INCOME
Discussing this with your tax professional is a good idea to make sure that your expectations regarding investment are realistic. But it is expected that most real estate owners with rental properties will enjoy not just a tax-free income stream but an overage of tax deductions for the property, which you could apply to other income sources. This situation is contingent on your designation as an active investment or REI professional and your overall income.
YOU CAN LEVERAGE YOUR CAPITAL
Finding fix and flip properties is always challenging. Hard money lending can offer funding faster and more efficiently than traditional banks. Additionally, they can provide great tips to use your capital to get the best return for your investment. They are the best lender for hard cash and could give you more money if you have a more lucrative offer.
For example, Angela H. found the property she believed to be so profitable that Do Hard Money qualified her for 100% financing. That is, they paid the entire cost of purchase and rehabilitation in addition to 63% of the closing costs, leaving only $5,000 cash available to close. The funding discount allowed her to take a bigger portion of the profits, estimated to be total earnings of $51,818.
YOU CAN TAKE ADVANTAGE OF INCREASED TAX DEDUCTION STRATEGIES
Investments in fixed and flip properties and later using these properties as rental properties can offer you an excellent chance to claim personal expenses to qualify for corporate deductions. As rental and retail real estate investments are business, travelling expenses to inspect properties and payments to other people who manage your property (if relevant) could be considered tax deductions; thereby giving you tax advantages for the cash flow from your property.
YOU CAN USE BOTH RETAIL AND RENTAL INVESTMENTS AS A RETIREMENT PLAN
Planning for your future requires an enormous amount of discipline and discipline that most of us do not possess. Many thrifty people have lost their retirement due to investments that failed or were destroyed by the market crash. It is good to know that fix-and-flip investing is not just able to give you a sound retirement plan but also aid you in restructuring your credit, eliminating financial debt and achieving financial independence without the need for a 9-5 work schedule in just one deal that is profitable that you could earn as much as $10,000 or more and perhaps $50,000 within just a few several months.
Also, people who opt to lease their properties renovated for a rental can fund their retirement by generating a constant cash flow. Larry H. has reached retirement age but cannot afford the money to retire. He didn’t want to be a Walmart greeter. He was aware of investing in real estate and decided to visit Make Hard Money to help start his journey.
When he first started, the investor earned an estimated $27,020 in profit and only needed to pay $705 in cash to close the deal! We were able to pay for 100 per cent of the purchase price as well as rehab expenses. The second deal was much more profitable, earning an estimated $87,333 and only $5,135 cash at closing.