Posts Tagged money in your pocket

Real Estate Investing Five Indisputable Benefits You Can Bank On

If you’ve ever played Monopoly, you already know that you can’t go wrong investing in real estate. Compared to stock market investing, real estate investments are much safer and less affected by economic downturns. But the advantages of investing in real estate don’t stop there. Real estate investments have at least six indisputable benefits that will make a positive impact on your bottom line.

Real Estate Investing Has Tax Benefits

The government understands that real estate ownership and development is good for everyone. That’s why there are so many tax advantages to investing in real estate. Mortgage interest is deductible in most situations. In some cases, depending on how you finance and handle your real estate investments, even profits can be tax deductible. Sheltering your profits and deducting your expenses from your tax bill is just as good as putting money in your pocket.

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Why Most Real Estate Investors are Doomed to Failure

Let me start by saying that, sure, real estate can be a good investment. Real estate provides a hedge against inflation. And real estate often amounts to a forced saving plan. But most of the people who’ve jumped onto the real estate investment bandwagon over the last few years are going to fail. Here’s why:

Ignoring Returns on Investment

When you compare bank accounts, you know that 5% interest means more money in your pocket than 2% interest.

Similarly, you know that a mutual fund with a track record of 11% annual returns has made more money than a fund with a track record of 8% annual returns. Duh.

One picks investments and evaluates investment performance by looking at the return on the investment. This rule is true for stocks, bonds, and everything else—including real estate.

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