8 Reasons Why Real Estate is the Best Investment
Real estate has long been considered a solid investment for many reasons. It is a relatively safe and easy way for people to build wealth. If you are interested in investing in real estate in Mexico, I’d be happy to help you find the right properties.
Here are some of the ways investing in property can help you build an investment portfolio.
1. Real estate investments can provide you with a reliable and steady cash flow. Investing in rental properties is relatively easy as expenses are predictable and if your properties remain occupied you know what to expect in terms of profit margin.
2. Real estate appreciates in value. Real estate consistently appreciates, even during economic downturns, making it one of the more reliable investments. On average, real estate in North America appreciates between 3-5% annually. There are outlier years – 2021 saw a 17% average increase in home values.
3. Real estate investments help you retire. If you have been paying on your mortgage throughout your working years, you will experience greater cash flow as you near the end of your mortgage term and the principal is paid off.
4. Real estate sales are taxed at a lower rate than other income. When you sell your property, you are taxed short- or long-term capital gains which are usually lower than income tax brackets. Talk to me about setting yourself up for the best tax situation when/if you sell your home in the future.
5. Real estate equity can be leveraged. One of the most attractive reasons for investing in real estate is the ability to leverage your money. When you take out a mortgage to purchase property you reduce the amount of capital required. As you build up equity in the property, you can borrow against the equity or refinance the original loan, freeing up cash to buy another property.
6. You have control to improve upon your asset. Unlike an investment in stock, where you have no control over how it performs, you can improve upon your real estate investment. Updating or upgrading systems, finishes, appliances, and landscaping helps build value in your investment.
7. Real estate can be a great investment for vacation rental income in Mexico. Many of our clients either rent out a whole home or an extra room or casita.
8. Real estate investments offer great tax deductions in Mexico. Talk to your Mexico tax specialist and if you need a great accountant, ask us for recommendations.