Without Really Trying…
Have the stock market tremors of 2020 got you spooked? You’re not alone. Recent surveys show that more Americans are turning to the real estate market to find steady financial ground. Given that real estate can give you more of a return on your investment, why wouldn’t you. Whether you want to find a property to upgrade and quickly turn around and sell, or a longer term commitment like a rental property or a property that can serve as your primary residence while you make the improvements and sell in the future there are numerous ways to make an investment in the real estate market fit your budget and lifestyle.
Money Maker for the Masses
The stock market might get all of the attention, but the majority of Americans create wealth through real estate investments. The most common example is buying a home to use as a primary residence and waiting, sometimes decades, for it to increase in value. While this may be the most common, it is definitely not the only way to make money from a real estate investment. A property that can generate rental income, or an undervalued fixer upper with good bones that can be remodeled and resold are other options to consider depending on the time, energy and, of course, money, that you are willing and able to invest. Finding the right real estate gem for your financial crown can be a time consuming and frustrating process; which is why an experienced realtor with a clear understanding of your objectives can help maximize your investment while minimizing your headaches.
Interest, Inflation and Taxes...Oh My!
It seems like everywhere you turn someone is talking about historic low interest rates. These low rates make it a great time to purchase a house. But if you keep listening to the talk you’ll hear all the economists express worry about inflation. When interest rates stay low, inflation follows. Fortunately, inflation is actually one of the most powerful ways that real estate investments can build wealth. Inflation just means that money becomes less valuable over time. It’s why a hamburger that used to cost a quarter 50 years ago can cost five dollars today. While this can be bad news for other types of investments, real estate investors benefits from both sides of this equation. Because most of the big expenses involved in a real estate transaction - the mortgage, the property taxes, will not rise your costs remain fixed. But the decreasing value of money means rents and home values will rise. The combination of fixed costs and rising value is a powerful wealth building tool. Since inflation is inevitable you might as well harness it for your benefit.
Speaking of inevitable, you can’t talk about money without talking about taxes. But again, here is where a real estate investment means good news. Most homebuyers are aware of the tax deduction they get on the mortgage for their primary residence, but rental income from an investment property also comes with some tax benefits. Without getting too technical about it, you are allowed to write off a percentage of the home’s value from the profits generated, and since the value often exceeds the profits generated, your profits could be tax free!
Even before the Pandemic hit Utah was one of the fastest growing states in the country. With the recent expansion of remote work making relocating a reality for more people Utah has become one of the top ten real estate markets in the country, according to the Salt Lake Tribune. A fertile market to try growing your wealth.
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