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There are more than 7 million real estate investors in the US. With the housing market on the rise again as people return to work after the pandemic, the number of investors is already increasing. More people are looking for reliable investment options, and real estate is a top choice.

If you want to invest without taking a chance on the volatile stock market, turn to real estate. But why is this a good choice? Read on to learn about the benefits of investing in real estate.

1. Benefits of Investing: Increased Cash Flow

Real estate investments will ensure a monthly income. The income rental properties generate can offset your investment expenses, like mortgage payments and operational expenses, putting money in your pocket.

As time passes and you pay off your mortgage and build equity, the cash flow increases.

2. Tax Breaks and Deductions

There are many tax breaks and deductions real estate investors can turn to during tax time. You can deduce the costs of owning, operating, and managing a property, as well as legal fees and related travel expenses.

If you sell the property for more than you paid for it, the gains are taxed as capital gains and not income. By using one of the top investing tips, turning to a 1031 exchange, you can also expect to pay less in capital gains taxes if you buy in areas in need of investments.

3. Inflation Hedge

As the economy expands, the demand for real estate drives rent prices up. For the investor, it means higher capital values. Unlike other kinds of investments, real estate reacts proportionally to inflation.

4. Builds Equity

If you received a loan to complete the real estate deal, including from the Thrift Savings Plan (TSP) for military and federal government employees, you have to pay it back with interest. As you pay these loans down, you are building equity, which is part of your net worth.

When you build equity, you have more leverage to buy properties and increase your cash flow.

Turn to this article to learn more about TSP and real estate investments.

5. Financial Security

Passive income is income you do not have to work for every day, and real estate offers it. You receive rent payments each month, adding to your cash flow without having to do anything.

Rental properties also appreciate in value over time. When it is time to sell, you can expect to make a profit from the property because its value has increased. Rents, too, tend to increase.

Invest Wisely

The benefits of investing in real estate outweigh the risks, making it the right choice for people looking for an investment that will provide cash flow and financial security. By letting you build equity and wealth, real estate allows you to invest in your future.

If you want to take the next step and want to know more about real estate investments, turn to our Real Estate page!