As a savvy investor, it’s essential to know the importance of adding real estate into your portfolio. While diversification is a big part of it, there are many other great reasons why you should be adding real estate into your portfolio in Chicago. Learn more about how to get started in our latest post!
Real estate should be incorporated into every investment portfolio for a multitude of reasons. The tax benefits and security alone are enough to make an investor see just how beneficial adding Chicago real estate into your portfolio can be! Below are only a few of the perks. Contact our team any time to learn more about how investment real estate in the Chicago area can benefit you!
Tax Benefits
Adding Chicago real estate to your portfolio will offer you a number of benefits. There are several deductions you will be able to claim for the properties you purchase. Things such as maintenance, repairs, travel expenses, taxes, and legal fees can all be written off. Also, the new tax rules allow investors to take 100% of their depreciation deductions upfront instead of having to break them out over several years. Investors will not have to face self-employment tax with real estate investments which can save thousands as opposed to other income streams.
Control
Adding real estate to your portfolio gives you an element of control not found with other investments. You decide how much to invest in the property, what to add, and when. You choose the monthly rental amount, when to sell, and who occupies the space. All in all, you call the shots, leaving your income potential entirely up to you. Many investors love the sense of control and independence owning investment real estate can provide. By adding real estate to your Chicago real estate portfolio, you’ll be able to have more control of exactly how much you are making.
Long Term Security
Real estate can be a source of passive income. You can still keep your day job while enjoying the profits from your Chicago rental property. A property occupied by the right tenants will provide you with a steady source of income month after month. Choose a rental property that is located in an area with room for growth. Ideally, you want to see your property values rise quickly in the not so distant future. Houses don’t appreciate at the same rate year after year, so look for a neighborhood with the potential for a big jump in value. When you own a house, you also have the ability to live there at some point. It can be nice knowing that if you ever need it, the property is there. While any investment comes with a risk, real estate will usually appreciate over time. The stock market can be a bit more volatile.
Diversification
Adding real estate to a portfolio of stocks, bonds, and securities can help to lower your overall risk. A smart investor will have a highly varied portfolio, keeping their eggs in a number of baskets. You should also diversify within your real estate investments. Single-family houses, multi-family properties, apartment complexes, commercial rentals, and even agricultural land can be a great investment if the profits are there! The real estate you own can often be used in a number of ways as well. You can choose to use it as a long term rental, a short term rental, or flip it if the time and price are right.
Income Producing
Your investment property should be bringing in a stable income each month. The mortgage you are paying for the property is usually covered as well as taxes, maintenance, and other ownership costs. The property can literally pay for itself in addition to bringing in a steady profit. The profits can then be reinvested into other properties, helping you to build your empire. If your property isn’t providing for you in this manner, consider selling the property and reinvesting elsewhere. Not every property is going to be profitable. While knowing what to look for will help you make a great buy, you may find that the numbers aren’t what you’d thought they’d be. Don’t stay stagnant in this state for too long! Sell the property and invest your money into a different piece of property that has a better chance of seeing a profit.
Our team can help you add the best properties into your real estate portfolio! There are many other benefits real estate investment can provide in addition to what is listed above. Our team is ready to help you get started on your investment journey today! Whether you are a seasoned investor or you’re just interested in what we can offer, our team can help you reach your goals. We’re happy to answer any questions you may have!