Benefits of Residential Real Estate Investments

Estimated reading time: 2 mins

Investing in real estate has long been seen as a lucrative means of making money. It stands to reason because there are billions of people on this planet and every single one of them needs a place to live. A good landlord can provide a well-maintained place for people to live and turn a profit, which is a win-win for both parties. There are many benefits to investing in residential real estate.

What Is Residential Real Estate?

Residential real estate is that real estate that has been developed for people to live on, but not more than four tenants per building. It cannot be used for industrial or commercial purposes. 

What Are the Benefits of Residential Real Estate?

There are lots of benefits to investing in residential real estate. Stefan Soloviev probably understands these as well as anybody. For one thing, one can invest more easily in residential real estate because the numbers are smaller. It’s easier for somebody to produce the funds required to purchase a single-family home or a duplex than it is to try to buy a commercial property. 

Establishing your identity as a good landlord who offers a good product will attract, and keep, would-be tenants. Where businesses can be subject to market turns that have potentially negative effects that could translate into lease issues, typically a tenant who is happy in his residence will not pick and move unless life offers them a reason to, such as a new job or other big lifestyle change. Most people don’t enjoy moving, with its packing and unpacking hassles, and they also know the value of an attentive landlord who’s on the ball when it comes to building maintenance and the like. 

When things go bad in the marketplace, businesses tend to suffer first. Individuals are always going to need housing, even when businesses are shutting their doors and leaving commercial properties vacant. Further, when worldwide issues take hold, such as COVID-19, people’s homes become quite literally their sanctuaries – that which they cannot do without. 

There can be some tax incentives for residential real estate, as well. Rental income can include deductions. Management fees, utilities, maintenance, repairs, insurance and mortgage interest are all things that can be factored into a net lowering of taxes. 

Probably the best part of investing in residential real estate is that you’re providing a necessary service for a community. By offering well-maintained living options at an affordable price, you’ll be maintaining the health of the community while making some income, too.

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