What Makes Real Estate So attractive To Investors
People find real estate attractive to buy or invest for so many reasons that it’s fascinating!
Throughout my 30 years journey in the real estate industry I had the opportunity to meet so many interesting people from all walks of life, people that had a great desire to invest or simply got to own a piece of property.
I was born and raised in The State Of Israel, a tiny country in The Middle East, where land is scarce and demand never stopped growing since its independence in 1948. I came to realize that for most Jews (but not only) it’s very important to own a property there. Real estate prices in Israel and Tel-Aviv and Jerusalem in particular are skyrocketing and are beyond reach for most middle class people. Properties there are as expensive as Manhattan NY and San Francisco CA.
For 8 years I was a Remax Franchisee of two offices in two very high end areas close to Tel-Aviv. There I had the opportunity to meet hundreds if not thousands of buyers and sellers. For most of these people owning their own residence it’s a must and buying an investment property is a dream comes true! They might be vested in other types of assets like stocks, bonds or simply own their own business but investing in real estate is considered as a créme de la créme…
Not once had I asked my clients what makes them buy an investment property. I assume that one of the most common responses would be “ Israeli real estate always appreciates in value”. This has not always been true when looking at short periods of time, but watching the market closely for three decades, this response has become very true. As the owner of New Dawn Investments and being involved in hundreds of transactions in the American real estate and abroad, I sense that most of our investors are looking to secure their financial freedom and enjoy passive income. Additionally, these investors understand the multitude of tax benefits that come along with owning investment properties.
The US government is considered very generous when it comes to owning real estate and actually incentivises people to invest in the local market. For instance, depreciation is calculated as a tax deduction even if the property goes up in value. The interest portion of the mortgage payment, the property taxes, the insurance, the property management fee, the HOA, the bookkeeping and accounting costs and more, these are all considered tax deductibles when reporting tax returns! How could you not want to get an investment property with all the money that comes back to you?!
Wait, there is more!!
The Federal Government also allows you to refinance your property and pull money free of tax!
All these tax benefits are included as to why people tend to invest in real estate: pride of ownership and being able to enjoy stability.
If you were to ask seasoned and new investors alike, why they prefer investing in real estate they will tell you that they like the idea that it’s a tangible asset unlike other types of investments. It allows them to being able to leverage their money by lending from banks or other resources is something that is less likely to happen with other types of investment and assets.
This is especially true when buying a property for a “buy and hold strategy” due to the fact that you can lease the property and use the proceeds to pay the expenses and enjoy passive income.
Closely following the most richest and successful people in the US and abroad, it’s quite obvious that they all own real estate in one way or the another. Some of them have accumulated their wealth through real estate. Others have been successful in different industries and invested their profits in real estate. It’s a smart choice since they avoid paying income taxes as much as possible using real estate as tax shelter. We are all trying to get somewhere and attain some type of level of security, wealth, and luxury in the ways that we see fit. Most of those whom already achieved this, own investment properties.
Personally, I like owning real estate especially because it allowed me to create wealth and stability for myself and for my family for so many years. Its diversity and its dynamic possibilities have been fascinating to me and kept me intrigued and excited to this day. I recommend to anyone who would want to invest in real estate or perhaps have questions to look through my website, call me or email me and I’d be happy to discuss with you how to go about it so you can attain stability and have a passive income to help you achieve all that you want to!