There are a number of reasons people choose real estate investment. It could be to increase their cash flow, receiving tax benefits, or to diversify their portfolio. Or, a combination of the three. Even if you aren’t planning on moving to Central California until you retire, you can make a real estate investment and rent it out now for the income, and retire to the home when you’re ready. These are all great reasons why investing in real estate is a smart choice.
Real Estate Investment Provides Cash Flow
Investing in real estate means an increase in your cash flow. It’s not necessarily an “easy” way to provide cash flow, but it can provide your family with some additional money while also investing in a property for the future.
And if you choose to hire a property management company, you may receive less money but it will be completely hands off. You can focus on your family, work, and lifestyle while receiving passive income from this investment.
Real Estate Investment Offers Tax Benefits
When you invest in real estate, the money you earn through your property is not taxed the same as if it were through a job. There will not be a self-employment tax on the money you receive from renters, which can be a significant tax break for investors.
The depreciation and lower tax-rates for long-term profits are two ways the government offers tax benefits for real estate investors. Yes, investing your money in a property means you will have less cash, but it also means you’ll receive a number of tax benefits for doing so.
Real Estate Investment Diversifies Your Portfolio
When investing, your portfolio can include a number of different assets. This could include stocks, bonds, and yes, real estate. Investing in real estate provides different benefits than the stock market, and also ensures that your money is protected rather than all funds being in one type of investment.
Real estate is tangible, which means you can increase the value of your property, further increasing your investment for the future. This means general upkeep like roofing and gutters, but it could also be a kitchen remodel or a new exterior paint color.
Investing in real estate in Central California means you have a chance to invest in a growing, beautiful area of the country while also reaping the benefits of owning investment properties. Whether you’re planning on using this only as a rental property, or as a future “forever” home, real estate investment offers a number of benefits.