An Inside Look at Investment Real Estate
From short-term rentals to leased tenancy, secondary homeownership is on an upward swing across the country. Here are five reasons second properties have been on the rise for investors.
1. Long-Term Investment
Real estate is typically a long-term investment that could span years (if not decades). Although the housing market tends to fluctuate, this type of investing allows homeowners the ability to ride through the highs and lows and come out on top. Additionally, property ownership provides ample opportunities for tax deductions, which can be critical to investors. Potential deductions include interest from mortgage interest payments if loans have been used to buy or renovate properties, the cost of repairs, and insurance premiums for investment locations.
2. Increased Flexibility
Secondary homeownership provides you with relocation options, whether your investment property is across the block or the nation. Whether you’re a young professional, a beginning family, or an established empty-nester, investing in multiple properties allows you to take advantage of growing real estate markets, offers you the ability to relocate on a whim, and generate passive income while pursuing other endeavors.
3. Inflation Resilience
In many ways, the real estate market is one of the safest ways to invest your money because it is largely resilient to inflation. If the cost of living increases, so does the value of your asset—the secondary investment property. Real estate largely reflects the rise of the tides of inflation, which serves inherently as wealth protection for investors with secondary properties. Leveraging for lower rates when purchasing real estate additionally gives investors more opportunities to profit once the tides rise again.
4. High Return on Investment
Because of real estate’s ability to be exponentially profitable, it is largely considered a “high-performing asset,” and with your ability to leverage tenant rent prices to compensate for repairs and loans, you ensure your ability to generate a higher return on your initial investment. Don’t forget that any property appreciation also boosts your overall return!
5. Diversified Portfolio
For experienced investors, real estate is an excellent opportunity to diversify a portfolio. Because tenanted properties grant a continuous income stream, this passive income can be beneficial to investors. Utilizing a long-term “buy and hold” strategy for this type of residential real estate investment allows you to keep this asset in the back of your pocket while engaging with other opportunities.
6. Control of Ownership
Unlike other investment opportunities, investing in real estate grants you the freedom to sell whenever you please. While real estate investment is typically considered a long-term endeavor with the potential to garner income over many years, you are in full control of your rental properties. With a finger on the pulse of real estate news, you can sell when the market is hot.
Secondary homeownership provides a multitude of opportunities as investment properties, from a high return on investment to complete control over your buying and selling strategies. When you’re ready to learn more about Seattle real estate, contact me
for more information.