September 15, 2016

Keith Knutsson Discusses the Benefits of Investing in Real Estate

Posted in Integrale Advisors LLC, Keith Knutsson, Real Estate tagged , , , , at 2:05 am by Keith Knutsson

Keith Knutsson Real Estate Investments

There are a number of people out there who would like to put their hard-earned money into an investment, but are unsure what the best way to invest their money may be. Ask any savvy entrepreneur and they’ll tell you that there are several advantages in investing in real estate. Although being a real estate investor isn’t always glamorous, it is one of the best ways to build your wealth in the long run.

Here are 5 reasons Keith Knutsson would advise in the consideration of investing in real estate:

1- Cash Flow

This is where your profit comes in, your money-making margin. After expenses, such as taxes, insurance, mortgage, or any unforeseen repairs, you get your cash flow/profit. This is where you should think big with your investment. If you have a rental that brings in a cash flow of $200, imagine what the cash flow would be if you have 30 times that because you invested in more than one property. This is a great way to quickly build up your income.

2- Federal Tax Benefits

The federal government allows you to depreciate, or deduct a portion of your property value from your income, which makes it extremely beneficial to your bank account. Especially for those who work full time as real estate professionals. And because rental income is considered passive income, self-employment taxes do not apply. Property investments can help reduce the burden that comes along with paying taxes.

3- Hedge Against Inflation

Inflation: “A sustained increase in the general level of prices for goods and services.” This means that a smaller percentage of goods and services can be purchased dollar for dollar over time. For example, stocks require more money to purchase with the increase of inflation, which prevents your money from going very far.

However, Keith Knutsson explains that this is different in the world of property investment. Real estate serves as a hedge against inflation and reacts proportionately to inflations. As inflation increases, so too do rents and the value of homes.

4- Loan Pay Down

Property purchased using a mortgage will actually be paid by the tenant, which increases your net worth each month. Because of the loan pay down, a rental property is essentially a savings account with automatic growth.

For example, if you owe $400,000 on a rental property, but within a year of renting you only owe $395,000 because your tenant is making the payment for you, this gives you a profit of $5,000. Once the term of your loan is paid in full (all thanks to tenants) you will have a significant asset that you can keep renting or even sell for a larger chunk of money.

5- Appreciation

Real estate prices do not always go up, in fact some will and have gone down, but the long term of property investments appreciate and go up in value. Prices will eventually rebound over time, which allows you to ride the wave of price changes and benefit in the end.

Real Estate is a tangible asset and with these five financial benefits, it is one of the most profitable ways to increase your overall income. With proper research and evaluation on types of property and how to get financed, you can invest in something where the payoff will be worth the journey.

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