If you are considering venturing into the field of investment then you can consider investing in properties. Investment in properties is quite popular as it is considered a fairly low risk investment. This kind of investment is usually less volatile as compared to shares which are the first option that comes to the mind of most while searching for an investment option. Here are some advantages of investing in properties.
1. Long term investment – One of the major reasons for investment is that it can fund you during your retirement when you no longer have the ability to earn. One sector which you can rely upon for having constant price is rental housing. Thus property given out on rent can be a good option for long term investments.
2. Tax benefits – If you buy a property, you can get a number of deductions on your tax return. These include the interest you are paying on your loan, maintenance and repair, insurance, rates and taxes, fees of the agent and so on. You may even get tax deductions for negative gearing. This is basically the situation when the cost of keeping the property which you have invested in exceeds the income that you generate from it.
3. Guarantees safety – Investments that run a low risk are always popular with amateur investors who are investing just for a financial backup and not as a profession. If you invest in property then your returns per year may even reach 10% in some country areas. Even if you buy a property in a metropolitan area, the high price of purchase will soon be compensated by the rental income you will generate.
4. Positive asset base – If you already have an investment property, then you can use this to your advantage when you want to take out another loan or invest anywhere else. This is because your lender will see that you are maintaining a loan without defaulting and thus your creditworthiness will increase.
Thus you can see how the above advantages make investment in real estate properties a lucrative option.
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