| many cases you can purchase a property for as low as 60 to 70 percent of the market value. When buying stocks, you may be able to find a stock that is considered “under valued” but generally that’s tough to do.
4. Real Estate Offers A Tremendous Amount Of Tax Advantages Through Depreciation. Real estate basically has two values, the land and the building(s) on the land. For example, if a property is valued at $250,000 and the assessed value of the land is $75,000, the building would be worth $175,000.
The government allows real estate investors to depreciate the value of the building in equal parts over its “useful life” which is defined as 27.5 years. So for example, based on the $175,000 building value above, the annual depreciation value would be $6,363.63 ($175,000 divided by 27.5). This means that for tax purposes, the investor would be able to reduce his/her annual income by $6,363.63!
Many people find the notion of depreciation to be confusing since it’s not really a loss of money. I recommend you check with a qualified tax professional for more details and how this can benefit you.
5. Real Estate Markets Are Insulated Local Markets. For instance, when the stock market falls, it takes down just about everybody and everything involved with it. When home values drop in one city such as New York, generally it does |
