Paper Assets or Real Estate?
The world is full of choice.
In today’s society we are given endless options, often making it difficult to decide what is best. For example, when it comes to investment, is it better to go with paper or property?
While paper may have its benefits, real estate certainly has a lot to offer too. In fact, there are five key advantages that make investing in property an extremely wise decision.
1. Control is yours when it comes to property. With a financial portfolio you cannot control the risk of your asset. There is no way to renovate or improve the value of a stock or bond. You also have to pay a current market value, which is not always the case when purchasing a home. Some properties trade for well below their true worth. Further, when you’re ready to sell, you have the choice of multiple exit strategies; ones that could still increase return, and yet with a decreased risk.
2. When you purchase property over paper, you also gain inflation protection. No matter what happens with the dollar, commodities or petrol, your investment will keep up with inflation. The same cannot be said for paper assets. Quite often they do not move at the same rate as inflation, resulting in investors losing money.
3. Taxes are one of the biggest expenses in life, so it’s smart to learn how to reduce them in order to get ahead financially. Paper asset income does not come with the same tax benefits as real estate. With property investment, you are able to claim back things such as depreciation benefits. Compared to other investments, the level of tax deduction is huge; sometimes up to 80% of the purchase price.
4. It is rare you would ever be able to use paper assets as leverage. Even if you could however, it’s risky business because you lack control over them. Property in comparison can easily be borrowed against, and there is strong potential for achieving an even greater return on investment.
5. Cash is king. It’s an age old saying that ultimately sums up the point of investing in the first place. People want to know what kind of return they could get, and where they can get the greatest amount. Most paper assets do not produce positive monthly cash flow. In fact, people tend to invest in paper for the capital gains, and unfortunately that comes with higher taxes and doesn’t provide income when the economy is hurting. Property investment, in contrast, is much less susceptible to economic fluctuations. It tends to provide a regular, steady cash flow, without the consistent anxiety of possibly losing your asset or initial investment.
It makes sense to invest in property over paper, and Estero Property has many homes available at bargain prices. Take control of your financial future by contacting us today.