Why Invest In Real Estate? 3 Benefits

Why Invest In Real Estate? 3 Benefits

In addition to financial returns, investing in real estate can help local economies. Rental properties help provide homes for people. Moreover, you can take advantage of tax exemptions and leverage. Here are some reasons to invest in real estate in not just Canada, but across the world:

Investments in real estate help local economies

While many investors are skeptical about helping local economies, investments in real estate can be very beneficial. Real estate investments make for good returns on investment, but they can also help local economies in more ways than one. For example, a city with a growing population will benefit from investments in real estate, as will a town with a declining population. This is especially true when real estate prices follow a cycle that mirrors the economy. By diversifying your holdings, you can reduce the risk of losing all or part of your investment in one location.

Rental properties provide homes for people.

According to a recent report, nearly 20 million rental properties are in existence nationwide, with more than 48.2 million individual units. Almost half of these are owned by individual investors. The rest are owned by businesses and nonprofits, holding smaller percentages. If you’re interested in investing in rental properties, there are a few things you need to know. Here are some tips to make the process easier for you.

Tax exemptions

There are several tax exemptions available to investors in the real estate industry. The first one is the 1031 Exchange. This type of exchange is a trade of a real estate investment asset for a new one with a reduced or no tax. This allows investors to roll over any gains accumulated from one property to another. The value of the replacement property must be equal to or greater than the resigned property’s value. In addition, it must be for a real estate investment trust.

Recent studies have shown that real estate investments have helped many people get back to work. Unemployment fell to 7.6 percent in March, which may have been a direct result of improvements in the housing industry. In addition, banks have benefited from the lowered foreclosure rate because foreclosed homes drain available money supplies. However, not all real estate investments are as beneficial to local economies. They can even help local economies by boosting the local housing market while helping people get back to work.