Many people purchase real estate in order to live in the home, but for some, it is an investment; as they have future plans of either selling or renting it.
Real estate values have been shown to appreciate over time, so if you have spare cash, it is definitely an investment worth researching.
It may sound simple, but there are certain things you first need to know about property investing in order for you to invest well.
First, where is the property? Is it an accessible area? Are there buses and other public transportation nearby, or do you need your own car to get there? Also, is it a prime spot; is it near good schools, the business district, malls, and other important places? A property in a commercial area may cost more, and in terms of tax as well, as real estate investment and taxes go hand in hand.
The property may cost more and no one knows how the place will be in the future.
On the other hand, investment property in a place that is just being developed might promise a higher appreciation in the future, as it can be relatively cheap to buy now, but there is no way to know exactly how well the area will improve over time.
When buying a home, always make sure that it is well-built; keep in mind that it is an investment, meant for use in the future, so it has to withstand the test of time, both physically and aesthetically.
Real estate investment and taxes go together, as investing in the former gives many tax incentives.
This adds to the appeal of real estate investment.
Some of the tax deductions one can get from investing in real estate are the following: Insurance premiums covering real estate investment can be deducted from your income, which is taxable.
The cost in maintaining your property is also tax deductible from your income.
Whether for painting, fixing the ceiling, repairing the bathroom, these are all maintenance expenses.
Property taxes that are paid to the state can also be deducted from your tax depending on your states tax rules, which means the higher you pay for it, the more you can save in your taxes.