With the recent stock market volatility, you may be looking for opportunities to diversify and protect your investment portfolio against the dips and the potential for inflation. Over the long term, real estate provides steady appreciation and is usually an excellent investment response to inflation. Savvy consumers are becoming increasingly interested in owning property to get the many benefits that help offset stock market volatility and future inflation.
Since mortgage interest rates remain near all-time lows, it’s a great time to add real estate to your investment plan. Here’s a look at several of the potential benefits of diversifying your portfolio into real estate.
Appreciation. While every market is different, home values have historically appreciated approximately 4% annually. This year appreciations have been much higher. Plus, as real estate is a leveraged investment, you enjoy appreciation on the total price of the home, not just the cash you put down to purchase it.
Tax benefits. Your tax advisor can help determine eligible tax deductions on an investment property, which generally include mortgage interest, property taxes, depreciation and operating costs, such as repairs and maintenance.
Tenant-paid mortgage. As your tenant pays rent, your mortgage balance is reduced, building equity in the property for a future sale or to borrow against and buy another property.
Cash flow. Depending on expenses, you can usually generate positive cash flow from the rent you charge.
If you’re thinking about investing in real estate, I can help evaluate investment properties that fit your financial goals. In addition, my Long & Foster partners in mortgage, title, insurance and property management are here to assist you every step of the way.
All the best to you and your family!
Lisa Joy