Real estate investing, seems to be all the rage around Montana. The most common form of real estate investment is rental properties and within that niche, you see a majority of rental properties being a single investment for an investor. Most investment properties are the one and only investment property for that particular investor. That is not to say there are not major property management companies, but a good majority in Montana are single investment properties. So why get into the real estate investment market? Our AVP of Commercial Lending, Alan DeWit has put together a shortlist for you to consider when thinking about investment properties.
The property will appreciate over time.
Property is one of the best investments you can make, because it almost always appreciates in value. The longer you have the property, the more money it should be worth. So you as the owner benefit directly from that equity, above and beyond the rental income. The catch here is that you have good rental history on the property, and the renters don’t damage the property.
The property is eligible for tax deductions.
The interest you pay on your investment property is tax deductible just like your mortgage. There are also several other tax deductions you can qualify for when you own an investment property. We recommend working with a certified accountant to help you maximize the amount you can deduct as an investor.
Accumulate equity through leverage.
You can use the equity in your investment property to purchase another property; and another one, and so on and so on... As long as the market is in good shape, this can be highly beneficial to you as an investor. This strategy allows you to get into multiple investment properties and start making money right away.
Investing in real estate can help hedge against inflation
Basically you are investing in something that will most likely maintain its value and even gain value. Real estate is generally considered hedging against inflation because real estate prices usually go up in value when there is inflation.
While this list is short, the benefits of commercial real estate investments are endless. Check out these other articles we found to help you with your research.
- Forbes: Why Passive Investing In Commercial Real Estate Is A Smarter Strategy Than Single Family Rentals
- Forbes: Investing 101: 10 Essential Tips For New Real Estate Investors
- The Balance: Real Estate Investing for Novices: An Overview of Investing Basics for Beginners
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