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Real estate: Five reasons to include it in your portfolio

On Behalf of | Dec 7, 2022 | Commercial Real Estate, Residential Real Estate

Whether you’re a seasoned investor in the Georgia area or are just starting, adding real estate to your portfolio can be a savvy choice. Land doesn’t depreciate, so your investment is protected, and real estate can be an excellent source of revenue.

Reasons to choose land

Consider the following five reasons to add real estate to your portfolio:

  • Inflation: Both commercial and residential property can hedge against inflation. Buildings can be depreciated, and renting them can increase your cash flow.
  • Leveraging: When you invest in real estate, you can use your equity as leverage so you can purchase additional real estate.
  • Low volatility: Land seldom loses value. Although buildings may deteriorate, the land remains valuable. Since there’s a limited supply of land available, there will always be a demand for it.
  • Performance: Historically, land has always been a good investment.
  • Tax benefits: Real estate investments may reduce your tax liability more than other investments.

Professional Advice

As with any investment, you should engage a professional to ensure your transaction goes smoothly. You should also consult your income tax professional to determine the best tax advantages for your investment.

Best investment?

Real estate is one of the best investments for a stable portfolio, and you can leverage it to increase the overall value of your portfolio and build wealth. Since property values may increase more quickly than the inflation rate, it will result in capital gains. Indirect real estate investments and REITs can be options for those who are just building their portfolio and may lack cash flow.

Don’t wait

If you are contemplating real estate as an addition to your portfolio, don’t procrastinate. Real estate can be a valuable addition to your portfolio and your retirement assets. Proper planning now can provide security in the future.