Why Real Estate is Always a Good Investment

Orchardside Home Plan

Considering relocation, but wary of risky market fluctuations? For the proactive investor, home ownership can open doors for a variety of financial opportunities and benefits. Read below to learn more about the advantages of acquiring valuable real estate assets. 

1. Tangible Asset Value

First and foremost, real estate holds its highest value as a tangible asset. In other words, it has a material form and can provide a sense of physical security compared to other investment types like stocks or bonds. Furthermore, the home you purchase can retain as much value as you decide to upkeep, or even increase in value over time as the land around it develops or with home upgrades.  

2. Potential for Appreciation

Real estate has historically shown the potential for long-term appreciation in value. As mentioned above, while there can be short-term fluctuations, properties in desirable locations tend to increase in value over time, allowing investors to build equity and potentially earn a significant profit when they sell the property in the future. According to VisualCapitalist, opens in a new windowU.S. home values have increased 106% in the last two decades alone. Keep in mind, the better maintained your home, the more your return on value is likely to be as well.  

3. Generating Income

Homeownership not only offers relief from the drain of monthly rent, but also offers proactive investors a way to generate a passive income. While you build equity in your property in the form of a much more affordable mortgage rate, you can also generate a separate income by land lording to help cover your own mortgage payments, costs for property maintenance, and even provide an additional cash flow.  

4. Investment Variety and Security

By having a diversified investment portfolio, including stocks, bonds, and real estate, you can reduce the impact of any single investment’s performance on your overall financial well-being. According to Investopedia, since real estate is typically high in demand regardless of market fluctuations, these investments double their value as a opens in a new windownatural hedge against inflation by driving up rental rates and allowing landlords or investors to increase their income flow or property value over time: 

There are many advantages to investing in real estate It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because as inflation rises, so do property values.”

5. Tax Benefits

Investing in real estate offers several tax advantages, some especially generous depending on individual state law. On top of writing off various expenses such as property taxes and mortgage interest rates on your tax return, South Carolina offers a hefty opens in a new windowHomestead Exemption that allows qualified homeowners to exempt up to $50,000 of their purchased property’s fair market value: 

“In 2007, legislation was passed that completely exempts school operating taxes for all owner-occupied legal residences that qualify under SC Code of Laws Section 12-43-220(c). The Homestead Exemption credit continues to exempt all the remaining taxes for the first $50,000 of value for all purposes except for school operating taxes.”

Like any investment, real estate comes with its challenges despite these promising benefits, and it’s important to stay informed of economic inflation and analyze market conditions. Conduct your own thorough research into your desired area and explore the region before finding a reputable, local, licensed professional near you to start your real estate hunt.

Interested in learning more about Anderson Farms’ home values? Fill out the form below to speak with one of our licensed Community Experts or to set up accommodations on our opens in a new window3-Day, 2-Night Discovery Package.