When you think about long-term investments, it usually means buying real estate properties no matter how big or small and commercial or residential.
Though many people plan to invest right from a young age (when they first start earning), there are some people who feel sceptical to spend a lot on huge investments like property purchasing. As the market value fluctuates according to the stocks and capital of the country, some may feel hesitant that their money will go to waste. They may be afraid that they won’t get returns when they sell the property.
If you’re one of those people and hesitating to go forward in spending on real-estate investments, you are in for a sweet surprise. It’s because long-term real estate investments never let your money go to waste. Here’s why we think so:
Builds your overall wealth
Buying properties means you’re increasing your overall wealth. You can say that so and so the amount is your net worth and that you have assets worth of certain money. It is one of the signs of a good long-term investment property that gives you the satisfaction that your hard-earned money is utilised at a good place.
For instance, if you’ve invested in a residential house, you can get fixed returns in the form of rent where your tenants pay you monthly wise. You can use this money to pay off the mortgage little by little. So, once you’ve completed the property debt, the value of the said property will be twice or thrice the initial amount. It means that you’ve increased your overall wealth by a considerable amount.
So, if you’re thinking to look for the properties that you want to buy, then go ahead without any doubt.
Tax deduction benefits
Once you’ve purchased a property, you can enjoy several tax deductions apart from mortgage interests and real estate taxes. Your income is saved as these deductions will help you get the returns of your earnings. Additionally, you can also enjoy tax deductions when you spend on repairs, insurance, maintenance, utilities, property management services, etc. You can also deduct the travel costs that you’ve used to visit the property when you file tax returns.
However, you can enjoy these benefits only when the property is under rental. Once you are staying in that house, you may not get the deductions for the renovations and such. Also, when you renovate your rental property, there are high chances of occupancy and a low vacant period. Overall, you can see good use of your money when you’ve purchased a long-term investment.
Assured future for your kids
Some people buy properties to give an assured future to their kids. For instance, if you’ve bought land when your kid is small, you can sell the land to get the money for your kid’s higher degree education. And the land value will be increased by the time your kid gets bigger.
If not for education, you can use the property however you want. Or you can simply write off the land in your child’s name and increase the property of your child while he/she is still young. Meanwhile, you can enjoy the tax deductions benefits, get to spend the rental income, and have a property under your name which gives you immense satisfaction.
A good retirement plan
You may not want to give up the land you bought with your hard-earned money. Then it can become one of your retirement plans.
For instance, you bought a house in your favourite city and at a good residential colony. You can keep the property aside and plan to spend your olden days in that home. You can live your retirement in a city that’s close to your heart and enjoy your last years with contentment.
So, before retirement, you can use the property as a rental home. And later when you’re ready to relocate, you can renovate the property and shift to it once the renovations are complete. In this way, you can enjoy the tax deductions that come under rental properties.
Don’t Hesitate To Take a Loan for Investment
Buying a real estate property includes a substantial amount of money and you may or may not have it all at once. However, if you’re sure that you can pay off the mortgage within some years or till your retirement, then don’t hesitate to take a loan for investing. There are several banks that lend you money with good interest rates for a property purchase. You can also make use of equity to purchase an investment property.
No matter what you think about real estate, it’s always a good idea to invest in long-term real estate properties. It serves as a backup for your future, your kid’s future, or simply as an added asset to your overall wealth.
Author Bio:
Erika Rhein, a professional writer and blogger by profession. I write on various niches, however, I prioritise writing on business, health, fashion, home improvement, lifestyle, etc. I always strive to provide users with useful and informative articles in a readable format. I aim to achieve a difference through my writing.
