Being a real estate investor isn’t always glamorous but it is one of the best ways to build wealth over the long-haul, especially for the entrepreneurial-minded. Here are six reasons why you should consider investing in rental properties.
- Cash flow
Cash flow from real estate is stable and far more predictable than most other businesses. That’s great for entrepreneurs enduring the ups and downs of start-up life. The cash flow can help float you though the bad times and live well during the good times.
- Tax benefits
Not only is the cash flow received from your rentals not subject to self-employment tax, the government offers tax benefits including depreciation and significantly lower tax-rates for long-term profits.
- The loan pay down
When you buy a rental property using a mortgage, your tenant is actually the one paying the mortgage payment, thus increasing your net worth each month. Because of the loan pay down a rental property is essentially a savings account that grows automatically, without you depositing money each month.
You must learn how to find great deals, how to finance any properties you want to buy. Additionally, you must treat it like a business and nurture it as it matures. It’s likely not going to be totally passive up front, but as millions of individuals throughout history have discovered, the payoff is well worth the journey.