Real Estate Investing

Real estate investing is a great way to build wealth, use equity as leverage, and protect your money from inflation. With well-chosen assets, investors can enjoy predictable cash flow, excellent returns, tax advantages, and diversification—all while leveraging real estate to build wealth.

The primary benefit of real estate investing is the ability to generate passive income. Rental income from tenants can help to offset expenses and put money in the investor’s pocket. Investors can also take advantage of numerous tax breaks and deductions that can save money at tax time. Along with steady income, real estate investments also offer the potential for increased equity from appreciation. As values rise, the equity in a property can significantly increase.

Real estate investors also have the opportunity to use leverage to boost returns. A 20% down payment on a mortgage, for example, gets you 100% of the house you want to buy—that’s leverage. Because real estate is a tangible asset and one that can serve as collateral, financing is readily available. With a good investment, you can turn a profit when it’s time to sell.

Another benefit of investing in real estate is its diversification potential. Real estate has a low—and in some cases negative—correlation with other major asset classes. This means the addition of real estate to a portfolio of diversified assets can lower portfolio volatility and provide a higher return per unit of risk.

Finally, real estate has the ability to act as an inflation hedge. As economies expand, the demand for real estate drives rents higher, which translates into higher capital values. This helps to maintain the buying power of capital by passing some of the inflationary pressure on to tenants and by incorporating some of the inflationary pressure in the form of capital appreciation.

Thinking about Buying, Selling or Investing in Real Estate in the Charlotte and Union County markets? Contact the Collins Real Estate Agency today and we can help!