The Benefits of Long Term Real Estate Investments

by Dennis Spivey, VP

Real estate investments can take on many shapes and forms.  Economic ebbs and flows can create short term winners and losers, but over time, investments in tangible real estate continue to provide dynamic returns.  Here are some reasons why:
Appreciation
Despite the recent crash, when you look at real estate over the long haul, it’s accurate to assume some level of appreciation.  Don’t let short term market cycles blind you from the fact that real estate is an asset class that continues to appreciate over time.
Inflation Hedge
Many analysts believe inflation is coming, and potentially already here. Owning real estate and using leverage at current low rates is a great way to hedge against coming inflation. If prices rise, so will the cost of housing; owning real assets are a great way to protect your wealth.
Passive Income
Holding real estate can be a passive investment that provides returns much higher than could be obtained through other investments (i.e. stock, bonds, etc.). With the ability to outsource property management, accounting, etc., investors can still make good returns while playing a very hands-off roll in the investment.
Tax Benefits
As taxpayers in a tightening tax system, any kind of deduction can be helpful. Owning real estate allows for the deduction of mortgage insurance as well as the depreciation of the property itself.
High Leverage
Real estate investing is one of the few investment vehicles offering the availability of financing.  Try walking into your bank and asking for a line of credit to buy stocks — they would probably laugh at you.  Change the asset to real estate, and there are multiple sources of financing waiting to write you a low interest rate loan.
Rent Appreciation
Most analysts have already stated that rents are expected to increase over the coming years. With an ongoing shortage of housing, the demand for rentals has the potential to increase significantly.  This will only help your bottom line.

CoreVest is a leading provider of financing solutions to residential real estate investors. We provide attractive long-term debt products for stabilized rental portfolios as well as credit lines for new acquisitions. For more information about how Corevest can help grow your rental and rehab business, please call Dennis Spivey at 310.752.5025 or email [email protected].