Everyone in life takes their own individual path when it comes to what they do with it. Some choose to live life adventurously, traveling around the world and never really staying in one place. Others choose to settle down into a quiet life, with the view of getting married, having kids, and owning their own home.
Some might want to own a home and invest further into more real estate and other ventures. Others might be happy with just one property. Some might not even get the opportunity to buy their own place.
If you’re able to see an opportunity to invest in property during your lifetime, it’s worth grabbing it with both hands. It’s not just for your benefit of you now but for your future self and any others, you become responsible for in that time.
Why is it important to invest in property? Why should you consider doing it, even if it’s not something that was ever on the cards for you? There are many benefits to investing in property and hopefully, by the end of this article, you’ll be tempted to invest your money into property at some point.
Investment into property can be leveraged
When it comes to investments, property is one that can be leveraged, unlike other opportunities and assets you invest in. With real estate, you can put down a fraction of the home’s cost.
You’re then invested into it, while you’d need to spend X amount on the stock in order to own it fully. Whether that’s $500 or $10,000 of stock, there’s much more benefit to having $20,000 invested into a $200,000 property.
Over the years, as long as you’ve got a good credit score and an approved loan, you can then pay off your property bit by bit, holding more of the investment as the years go by. While stocks can vary in price, they’re a more volatile asset. You may also only keep in what you invested, rather than adding to it.
With investment into property, you’ve got a lot more potential to increase your ROI.
There are tax benefits available
Any business owner will tell you that there are perks to owning a business, mainly that you’ve got the opportunity of tax benefits available. Tax benefits – or take write-offs – as they’re commonly referred to, allow you to write off particular expenses.
This would be useful if you’re planning to invest in more than one property and build a real estate portfolio. There are a number of tax benefits available and expenses that can be written off, including:
- The interest on your mortgage loan
- Maintenance expenses
- Depreciation
- Real estate taxes
- Homeowner’s Insurance
If you have a tax advisor, then it’s certainly worth running this by them to figure out what more you can save.
There are buying schemes that exist
While buying a property is a tough one to achieve, especially in recent years, there are still plenty of buying schemes that exist. Depending on where you live and in what country you reside in, this might be more readily available or not so.
For example, there’s hopefully a $25,000 first-time home buyer grant application being offered under Biden’s administration. In the UK, you’ve got the opportunity to buy through a Help to Buy Scheme.
It’s worth assessing what’s available to you, whether you’re limited on funds for a deposit or not. Investing in property is something that will likely be encouraged as much as possible by governing bodies, so it’s worth exploring, if anything, is available to you.
It offers financial security
It’s hard times for most people financially at the moment and when it comes to having your own property, it does offer that level of financial security that most people would love to have.
When you invest in real estate for the long term, you know that you’ll be getting more value the longer that you own the property. As you pay off the capital on the property, you own more and more of your property until you own it fully.
Even then, you might find that due to property prices and trends, your property goes up in value too. While this might not always be the case and it can also go down in property value, property can offer you financial security.
Financial security is not something that everyone can achieve but when you have real estate attached to your name, there can be some financial relief that it provides. Of course, there’s also the flipside of property, whereby not keeping up with payments, can land you in hot water.
Regular cash flow is available when renting properties
If you’ve managed to get yourself a property for yourself to live in, then you’re already thriving. If you’re looking to achieve even more when it comes to financial investment in real estate, then buying multiple properties is worthwhile.
If you buy and hold real estate that you then rent out, you can earn a monthly cash flow. That cash flow increases the profits that you make from owning real estate. It helps pay for the properties themselves that you might be tied into with the bank.
You may even have extra funds available that you can put toward your own quality of living that come from the rent you make on the property or properties you let out. Of course, there are always risks to renting property, especially if you’re unable to get regular or consistent tenants remaining in your property.
Make sure you’ve weighed up your options and you manage to get a renter within your property.
You can influence appreciation
With a property investment, you can force and influence appreciation. That’s something you can’t really do effectively with other investments.
How do you do this? Well, you can add to the property to increase its value. For example, if there’s enough land, you might want to do renovations on the home where you’re able to add an additional room or two to the property.
This can really increase the value of the home, especially if you don’t intend to sell it too near in the future. You may also want to do renovations to older and more dated rooms like your kitchen or bathrooms if they’ve not been done for many years.
It’s worth being careful and assessing what expenditures are going to greatly appreciate your property and which ones might not actually be worth spending the money on. For example, replacing a carpet or two, might not really add much to the value of your home but will end up costing you hundreds of dollars that you could have held onto.
Of course, making improvements to the home is all about the length of time you intend to spend on the property. If this is your forever home, for example, you might want to do those minor but less effective changes to your property’s value.
What to look for in your first property
So what should you be looking for when it comes to your first property? When it’s your first property, it can feel a little overwhelming to know what you should be looking for or not looking for. With that being said, here are a few tips that might help you figure out which home is right for your needs.
The location
Location is an important one because the positioning of the property might influence the price and how comfortable you feel. For example, some properties might be near the coastline or near water which poses a potential flood risk.
You may also want a property that’s off the road and not down a main stretch that could cause danger to young children and pets who are often outside playing.
What’s the neighborhood like
The neighborhood is a real swaying point for many people when they’re looking for properties. Whether you live in the same area and want to buy in that area or you’re looking further afield, always be aware of what the neighborhood is like. Check it out before you go property shopping as you want to feel safe in this area.
Nearby amenities
What are the nearby amenities like? This is anything from local shopping malls to the availability of restaurants and other local business establishments. You may not be fussed with certain amenities, however, for other people, it might be a major influence over which areas they look at when buying a property.
Schools and other educational facilities
Be sure to access schools and other educational facilities when you’ve got a young family or growing family that will be at some point, going to school themselves. You want to make sure that the local schools are up to the standard that you want and expect.
Sizing and floor plans
Be aware of sizing and floor plans. This is something you’ll want to assess as you visit the properties you’re interested in.
Investing in a property is definitely something to consider, especially if you’re looking to invest your money during your lifetime.
