Real Estate Blog

Top 5 Benefits of Investing in Brooklyn Real Estate

When it comes to investments, there are a lot of very solid choices. However, when it comes down to it, real estate investments have always proven to be the best choice. This has made it the overall most popular and recommended form of investment, and there are a lot of reasons for this. Of course, you also have to consider your personal budget and needs, but real estate is generally the safest option anyway. So, in order to help you out, we have put together a list of the top 5 benefits of investing in Brooklyn real estate, and we hope you find it helpful and informative.

Price appreciation

Pretty much every type of investment has one thing in common: their value tends to fluctuate, in some cases quite wildly. This applies to anything from stocks and bonds to art and gold. However, real estate tends to only increase in value. Brooklyn real estate, especially, has been increasing in price over the last few years according to recent stats. As such, investing into Brooklyn real estate is a very safe choice overall, as long as you can cover the initial price. You are pretty much guaranteed a return on your investment, and purchasing an investment property in 2022 is the right choice for you. The amount of profit also only increases with the amount of effort you put into the property. Whether you want to sell it or rent it, investing into a piece of real estate is by far the best choice.

Real estate appreciates steadily, unlike other types of investment which vary wildly.

: person looking at graphs

Lower risk that other investments

Most types of investments tend to fluctuate in value, which can make them quite risky. This is because their value is entirely subjective, this applies to bonds, stocks, collector’s items, stamps, precious metals and so on. Real estate, however, is a hard asset, and this means that real estate has intrinsic value. Other types of investments rely entirely on public perception, economic conditions and complex conditions. While this applies to real estate to some extent, it also has real, intrinsic value because people will always need homes. If you own a home or some other type of building, it will always hold value despite the current economic situation. The same doesn’t apply to stocks. Additionally, you can always choose to move into your property. However, experts from U. Santini Moving and Storage Brooklyn warn that you should rely on experts in order to avoid damaging your property during the move.

Ability to leverage investments

If you are familiar with the world of investing, then you know that leverage is a crucial principle in it. Leverage, put simply, allows you to use resources and money beyond what you pay out of pocket. The most common example of this is when buying a home with mortgage financing. For example, if you plan to buy a property to earn extra income but don’t intend to live in it yourself, and you have $300,000 available. Without leverage, your budget is only $300,000, but when you consider that when buying with a mortgage you typically only need 20% as a down payment, suddenly you can buy a home worth $1,5 million instead. In addition, by only putting down a small percentage of the property’s value, you reduce the risk involved with investment. If you want to profit from it, however, consider how you can increase your rental investment ROI.

Investing is much easier when you have leverage, and real estate is an easy source of it.

people shaking hands

Hedge against inflation

To explain it in the simplest way possible, inflation is a general increase in prices and a fall in the purchasing value of money. Rising in the prices of rent and real estate are the most painful effects of inflation, unless you are a real estate investor. This is particularly apparent in a city like NYC, and more specifically a borough like Brooklyn. Real estate essentially protects you from the harmful effects of inflation, because you can simply sell your property at a profit. Alternatively, if you are renting the property, you can simply raise the rent. And in times of low or no inflation, you could always choose to move into your property instead. Just remember to protect your furniture during the process. Moving furniture can be difficult and even dangerous, so consider hiring movers to make sure everything goes smoothly. After all, experts can facilitate the process effectively.

Tax benefits

Another very attractive benefit of investing into real estate are tax benefits. There are lots of ways how real estate investments can cut your tax bill. The most common is claiming tax deductions such as depreciation. Put simply, all properties and appliances in said properties depreciate over time because of use. Other tax deductions include regular expenses such as utilities and insurance, and even interest on your mortgage is tax deductible. Investors, typically, sell their properties for a profit, and the IRS takes a cut of these profits. However, tax conditions are more favorable for anyone who owns their property for more than a year. As such, real estate investment, especially in Brooklyn where it’s extremely easy to sell a property quickly, is a very smart choice. If you want to start taking it seriously, though, you should know how to spot a fake real estate agent.

By investing into real estate, you become eligible for a number of tax benefits.

tax documents on table

Top 5 benefits of investing in Brooklyn real estate – closing thoughts

There are very compelling arguments to be made as to why real estate investment is by far the best choice. Especially in Brooklyn, where real estate is gaining value and shows no sign of stopping, and selling a property is typically quite quick, real estate really is the way to go if you are looking to turn profit easily. Of course, there are benefits other than immediate profit from selling the property which you should keep in mind. And to top it all off, real estate is a relatively risk-free investment. We hope you found this list of the top 5 benefits of investing in Brooklyn real estate helpful, and we wish you a good day.

Photos used: https://www.pexels.com/photo/manhattan-bridge-seen-between-buildings-2706653/

https://www.pexels.com/photo/photo-of-person-holding-smartphone-6802042/

https://www.pexels.com/photo/photo-of-two-people-shakehands-2058130/

https://www.pexels.com/photo/tax-documents-on-the-table-6863183/

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