Is buying local real estate a smart investment?
There are many reasons why investing in Bluffton or Hilton Head Island real estate makes lots of sense. For starters, the return on investment is better. Why settle for 1% or 2% from your bank, when you can get 9% or 10% from a good rental property?
Additionally, low interest rates, good property values, and high rental demand (both long-term and short-term), enhance the investment appeal. There are all many affordable cash buy real estate investment opportunities on both the mainland and on the island.
These days, when managing your money, it is important to invest in income streams that give you a positive cash flow, leverage your debt, control your financial assets, and prepare to deal with inflation.
Even though we might not be in an inflationary market right now, the costs of goods and services are going up. We are paying more for food, utilities and insurance - just to name a few.
So earning more money makes sense, and I believe that it's a good idea to add residential rental real estate to your investment portfolio.
Here are five reasons why buying Bluffton and Hilton Head Island real estate is a smart investment:
• Positive cash flow. An ongoing income stream that pays for the property, can be used pay other expenses, and is higher than bank earnings.
• Increase asset value. Investing in the right property allows you to buy more assets with less money, multiply asset value, and increase equity as loans are paid down.
• Guard against inflation. With property values rising as inflation occurs, real estate investments have been proven to be a hedge against inflation.
• Favorable tax advantages. Tax benefits for real estate investors include: mortgage interest deduction, depreciation acceleration, and deduction of expenses related to managing the investment property(s).
• Physical financial assets. Income-producing real estate is an asset that has meaningful value. Both land and building have value, and the income that is produced has value to current and future investors.
Important note: When investing in real estate, I strongly suggest that you obtain advice from your Realtor, attorney and accountant or financial advisor.
Larry Stoller is a broker and Realtor with Real Estate Five of the Lowcountry. Larry@RealEstateFive.com, RealEstateFive.com, Sun CityOpenHouses247.com