Investing on Real Estate Why should you do it?

Real estate value increases four to five percent on an average each year depending on the place it is located at and the market conditions

. While investing in stocks and bonds may give a better turnover in terms of growth in percentage per year, here is why real estate is still the much appreciated form of investment in terms of lucrative returns. Buying a home is not usually done with a single down payment instead people normally tend to go for mortgage loans. Now if you have taken a loan for buying a $200,000 home and put $15,000 down, the property value might see an increase of about $5,000. This means that you have made a profit of $5,000 on a payment of $15,000 which is much more than the average real estate value increase on a certain property. Your rate of return when buying a real estate is thus much than most other investments.

Then there are income tax savings you make while investing on a real estate in the form of tax deductibles on the interest on mortgage and the property taxes. Eventually, the taxable income on your gross income is substantially reduced. Also, the costs incurred on renting a house are much more than the costs of mortgage payments in buying your own home. While the rents increases rapidly each year on real estate, the fact that you opt to get a fixed rate mortgage on your real estate ensures that you pay almost the same amount for an extended period of over thirty years on the loan. So it definitely makes sense to buy real estate than to rent one. Although interest rates are bound to fluctuate, it still remains cheaper than renting a house.

Owning real estate also gives you freedom to do a lot of things like renovating the interiors as per your requirement and needs, maintaining front yard or backyard gardens and performing some permanent damage-poof refurbishments to your home that is going to serve as shelter to you and no one else in the long run. The current recession period has made the real estate market a buyer's market. If it is a place to live in you are looking for this is the good time to plunge in the real estate market and find you a good home. On the contrary, if it is investment that you are looking for there is always a question of how soon is the real estate market going to bounce back. Experts have predicted that residential properties are likely to stabilize. Also with the interest rates being substantially reduced to affordable prices, the recent downward trend in the real estate market is seeing more buyers of property constantly pouring in

Investing on Real Estate Why should you do it?

By: Natasha Mohr

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