According to our Raleigh real estate agent, real estate investments for business owners always "pay off"!
Finding success as a Raleigh, NC entrepreneur can be an exciting thing. While spending time operating and overseeing the success of a profitable business venture is satisfying, searching for ways to properly invest profits from that success can be rather difficult.
The level of difficulty associated with deciding where to invest profits often leads entrepreneurs to invest in safe ventures. IRA and 401K plans are traditional, more preferred reserves. Planning for the good benefit of yourself and your employees is important, but studies show that when investing profits from a successful business, real estate can be a very successful investment.
Though many business owners have no desire to own properties to rent or flip, the recent Raleigh housing market offers a number of arguments in favor of this investment strategy. Below are a few reasons why successful business owners should seriously consider buying Raleigh real estate as a way of investing profits.
Leverage. According to trulia.com, “Real estate is one of the few investment vehicles where using the bank's money couldn't be easier. The ability to make a down payment, leverage your capital, and thus increase your overall return on investment is incredible.”
Tax-free Growth. In the event that a business owner decides to purchase rental property, appreciation is certain. Pulling together a tax-deferred strategy can help you in many ways. You can even consider charitable trusts, an installment sale, or 1031 exchange to lessen your tax liability in the future.
Cash Flow. As most know, depreciation and mortgage interest deductions tend to allow cash flow to be tax-free. Investors rarely pay taxes on cash flow. This in turn allows them to wait for capital gains on a future sale of the property.
Tax Write-Off. Also according to trulia.com, “Depending on your classification as an Active Investor or Real Estate Professional and your income level, there is a good chance your rental property will not only give you tax-free cash flow, but an overage of tax deductions you can use against your other income. With that said, this is something you want to discuss with your tax professional before investing so your expectations are realistic.”
Investment in real estate as a business owner has many benefits. It’s important to explore all your options before deciding whether owning property is right for you. To speak with a Raleigh real estate agent at The Roark Premier Team contact us. You can take a look at our online listings as well as get a bit of insight on home buying and selling.