Investing In Real Estate
Investing in real estate has become increasingly popular over the last 50 years, and is one of the best investments you can make for you and your family. Buying real estate is about more than just finding a place to call home – it’s a place of security; a place for family members to gather and enjoy special moments.
While home ownership does not yield an immediate or short-term return, overtime you can build equity, which can be used for college, home improvements, etc. Moreover, with proper estate planning, you can leave your real estate assets to your heirs when you pass away.
There are also tax advantages to home ownership that you would never have as a renter. As a homeowner, you’re eligible for certain tax deductions, such as mortgage interest and property taxes, which could potentially reduce your taxable income, thus increase the financial benefits of home ownership.
As a seller, you can walk away from the closing with profit that does not have to be reported as income, depending on how long you owned and lived in the home before the sale. If you owned and lived in the home for two of the five years prior to the sale, then up to $250,000 of profit is tax-free, if you are single; up to $500,000 if you are married, filing a joint return.
Homeownership may not be for everyone, but there is much potential with real estate – although it does not mean that it is an assured gain, as we saw in 2006-2010. As with any investment, use wisdom, make careful choices and weigh out the costs and benefits of your actions before diving in.