Why Real Estate Investment Is Worth It?
When you think about real estate investment, you believe that the real estate is the best form of investment yet. However, before you go out and buy a real estate property, does it mean you are going to make easy money? Here are special considerations why real estate investment is the right choice for you:
- Cash flow
When you refer to cash flow, it is the profit that is left, after all the paid expenses on a single or multiple properties. For example, if my property made $4,000 from the rentals in a particular month, and the expenses for it reached $2,000, what is left and would be my cash flow is $2,000 for that month. It may be not a lot but as we proceed with the tips, you will find out that real estate is still worth it.
- Appreciation Value
Appreciation value is in simplest terms is about the value that your real estate property has. For example, if you bought a real estate lot for $100,000 ten years ago, and today that property is worth $500,000, the appreciation value made you $400,000! Isn’t that amazing? But be careful with appreciation values, not all property increases its value annually. Prices in real estate have a long-term drive and thus, increases over time.
- Property Loan
When you buy a real estate property for rental purpose, it has a mortgage. This means each month depending on your loan agreement, you have to make a payment and normally, that payment has interest and the principal amount. Interest is a percentage amounting the lender’s profit, and the principal amount is the amount of the loan.
- Tax benefits
Finally, the final consideration in real estate investment is the tax benefits the government gives to real estate investors. There are varied benefits and it pays to be cognizant of them. For example, the income tax due for payment can be offset in a process called depreciation. The government can consider lowering the taxes based on the depreciation value of the property.
A great example of a real property investment that is all worth it is the Serangoon Ville property in Singapore. It has been sold for $499 million Singapore dollars to Oxley Serangoon, a joint venture company. The developer company aims to re-apply the lease for almost a century term, at a premium of $195 million Singapore dollars to Singapore government.
Serangoon Ville is a former HUDC estate, located at Serangoon North Avenue, has 244 units in 3 blocks of 13 levels and 4 blocks of four-stories apartments. The location is proximal to schools like the St. Andrew’s Junior School, Maris Stella High School, and Rosyth Primary School. It is also near the Chomp Chomp Food Center and the NEX shopping mall.
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