Investing in real estate is still one of the best and most reliable ways of saving your money and turning a healthy profit at the end of the day. The challenge with buying stocks is that the only way to make money is to sit by and hope that the stock will increase in value, and then sell it at just the right time. But when you are investing in real estate, there are many different ways to turn a profit.
1. Earning a rental income – when investing in a rental property, your main source of profit will be the rental income that your property earns on a monthly basis. Unlike the stock market, rental income is a steady and reliable source of revenue for every investor.
2. Buying low and selling high – if you can buy property at a good price and below market value (such as in cases when the seller needs to close the deal quickly or in cases of foreclosure) you are practically guaranteed to turn a profit. And unlike stocks, which must be sold at market value, if you can find the right buyer at the right time you can sell your property at above market value and turn an even bigger profit.
3. Renting out multiple units – if you are renting multiple rooms to multiple tenants within the same property, you can charge more than if you were renting the entire property to a single family. If you divide your property into a duplex or a triplex instead of a single family home, you can significantly increase your income.
4. Renting out to businesses – if you can rent your property out to a business, the rent is usually higher and established businesses are generally more reliable tenants.
5. Tax benefits of real estate – depending on the specific nature of the tax code where you live, mortgage interest can often be deducted from your rental income, creating a tax free profit. Moreover, the cost of making improvements to the property can often be deducted from the rental income, and the value that these improvements add to the property is yours to keep.
Yes, the stock market can be profitable, but it is also extremely volatile. On the other hand, real estate investment remains one of the most stable ways of turning a profit. When you buy stocks you have no control of the outcome: you have no way of knowing how sudden structural changes within the company or urgent international developments can impact the value of your stock. With real estate you have control of your property, and you can decide when to renovate, when to rent, and when to sell. And in a world that is often volatile and unpredictable, that can make all the difference.