Investing in real estate property can be very expensive. This is the reason why most people think about the risks rather than the benefits of putting their money in real estates. But time has proven that real estate can be a very good investment. There were many real estate disasters in the history but the fact is, real estate is a need. Therefore no matter what the market condition is, people will still buy a house, says a Napa valley realtor.
Here are some facts that you need to know about real estate investing:
You’re in control
When you invest in real estate, you are your own boss. You control the situation from start to finish. You decide how much money you want to invest in and on what type of property. You choose the bank where you can apply for a mortgage and you can select what term if you receive several offers. You choose the tenants, make an agreement with them, and manage your property.
You let the tenant pay for what you owe
This is how it works: you use a loan to buy the property and then the monthly repayment will be taken care of by the tenant. This means that after your loan is completely paid, you really didn’t spend your own money to buy the property yet it is under your name. Great idea, right?
There is always a bigger chance for your real estate property to appreciate in value over time. Sometimes, the value will increase even without you doing a lot of things. As long as the property is well-maintained, it simply grows in value. This is true when you are in a preferred location and your area is undergoing developments.
When you are under a fixed-rate mortgage, you really don’t need to worry about inflation. No matter how high the costs of other utilities, your investment is inflation-proof.
Positive cash flow
If you have a property being rented out and the rental income is higher than the mortgage loan payment, monthly utility dues, and estate taxes combined, you can expect for a passive income every month. The passive income may not be that high, but it is a great help knowing that you get something every month.
Very low maintenance cost
You really don’t need to pay a lot for maintaining the cleanliness and the condition of your property. If you are a jack of all trades, you can do most of the maintenance job which saves you money from paying a repairman. Think of maintenance duties like a part-time job wherein you only need to report to work once a week.