If done correctly, investing in real estate can be one of the greatest investments you ever make. The possibility of increased income and long-term wealth are exponential when it comes to real estate.
Chris Lamb of Niagara Falls, Ontario, is an entrepreneur and property developer from the Niagara Falls region of Canada. He provides his expertise regarding the top benefits of real estate investment.
Appreciation
Chris Lamb of Niagara Falls notes that one of the great benefits of investing in real estate is appreciation. It is extremely common for the value of real estate to appreciate or grow over time. Thus, if you made a sound investment like investing in an up-and-coming area that started to boom, you will almost certainly be able to turn a profit when you decide to sell the property. In addition to the value of the entire property appreciating with time, rents also tend to rise, often on an annual basis, which also leads to greater cash flow for the investor.
Tax Incentives
Tax incentives in the form of tax breaks and deductions are yet another benefit of investing in real estate. That’s right, real estate investors have the added bonus of being able to take advantage of all kinds of tax breaks that will save them money come tax time. Although tax laws vary depending on the country and state or province you live in, Lamb claims that you can generally assume that you’ll be able to deduct the costs of owning, operating, and managing whatever property you invested in.
Diversification
Most of us know that diversifying one’s portfolio is key when it comes to managing finances. Real estate provides just that — an opportunity to diversify, shares Chris Lamb of Niagara Falls. Lamb claims that real estate typically has a low correlation with other asset classes, which means that adding a real estate investment to your portfolio can serve to reduce volatility and raise the return per unit of risk.
Increased Cash Flow
One of the most obvious benefits of investing in real estate is cash flow. In real estate investing, cash flow is considered the net income earned on a real estate investment after all mortgage payments and operating expenses have been paid. Although real estate is not typically a “get rich quick” game, increased cash flow over time is undoubtedly a major perk. Further, the amount of cash flow typically only grows over time, as your mortgage gets paid off and maintenance gets taken care of.
Chris Lamb on Impacting the Community
Another benefit of real estate investment, though one that is maybe lesser known, is that investing in real estate can have a positive impact on the local community. Chris Lamb of Niagara Falls states that when someone invests in real estate, it impacts the broader market of that city or town. For example, such an investment can help provide houses to people in need, which in turn provides stability for families.
It can also lead to supporting the local economy by tenants of the building shopping at businesses in the city. It can even serve to increase city tax revenue. This is one of the greatest benefits of real estate investment, whether the investor realizes it or not. Plus, as the community where your investment is located flourishes, the more your property will appreciate in value. It truly is a win-win for both the investor and the community they are investing in.
