Today, I’m bringing you the first installment in a two-part series on real estate investing. For this part, I’ll be going over some of the advantages of investing in real estate.
The first benefit of investing in real estate is cash flow. But what does this mean? Essentially, your cash flow is the return you get on your property at the end of the year after all expenses have been paid.
When looking at cash flow, it’s important to examine how much you have invested in the property. A lot of my clients ask, “How much should I really make?” My answer is this: If you make less than 6% in the equity off of your property, you should sell immediately. However, most of my clients are making a return of more than 10%.
The second benefit is appreciation.Slow and steady appreciation adds to the benefit of owning rental real estate. Last year, we actually saw an 8% appreciation rate across the Wasatch Front.
The third and final benefit I want to go over is depreciation. Specifically, depreciation will bring advantages in terms of your taxes, since it provides opportunities for write-offs.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.