When 77 percent of millionaires invest in the same thing, it may just be a sign — and right now, it seems like all of the are getting the same message. According to a recent Bloomberg article, surveys indicate that the top alternative-class investment pick for millionaires in 2014 is — you guessed it — real estate. Direct investment in rental properties was the number one pick of the rich and famous, with a third indicating that they’ll be buying up some property this year.
These millionaires might just be on to something! Here are the top 5 reasons to invest in Birmingham real estate.Invest in Birmingham Real Estate
1. Diversification
Real estate tends to have little or negative correlation with other asset classes, like stocks and bonds. That means when an asset class falls, real estate remains the same or moves in the opposite direction. Adding real estate to your portfolio offsets volatility in any single asset class and reduces your overall exposure to risk through diversification.
2. Leverage
Real estate makes it easy to use leverage, or use borrowed funds to boost the earning potential of an investment. Usually, financing is easier to attain because a tangible investment is involved, making it even easier to profit from the bank’s money.
3. Rental Income
Speaking of other’s people’s money, the rental income you receive can be used to:
Pay your mortgage
Pay for upkeep
Generate cash flow
What other investment can boast that?
4. Appreciation
Choose your Birmingham investment properties wisely, and good things will happen — namely appreciation. Though the housing market has gone through a rough patch, historically, median home values have quadrupled over the past 50 years, says the U.S. Census Bureau. Appreciation means that our property’s value increases while your mortgage decreases — the perfect combination.
5. Tax Benefits
Investing in Birmingham real estate provides you with a number of tax benefits. From interest deductions to repair write-offs to depreciation, you can achieve a tax-free cash flow. Plus, you may be able to offset your other income through tax deductions. jcory
When 77 percent of millionaires invest in the same thing, it may just be a sign — and right now, it seems like all of the are getting the same message. According to a recent Bloomberg article, surveys indicate that the top alternative-class investment pick for millionaires in 2014 is — you guessed it — real estate. Direct investment in rental properties was the number one pick of the rich and famous, with a third indicating that they’ll be buying up some property this year.
These millionaires might just be on to something! Here are the top 5 reasons to invest in Birmingham real estate.Invest in Birmingham Real Estate
1. Diversification
Real estate tends to have little or negative correlation with other asset classes, like stocks and bonds. That means when an asset class falls, real estate remains the same or moves in the opposite direction. Adding real estate to your portfolio offsets volatility in any single asset class and reduces your overall exposure to risk through diversification.
2. Leverage
Real estate makes it easy to use leverage, or use borrowed funds to boost the earning potential of an investment. Usually, financing is easier to attain because a tangible investment is involved, making it even easier to profit from the bank’s money.
3. Rental Income
Speaking of other’s people’s money, the rental income you receive can be used to:
Pay your mortgage
Pay for upkeep
Generate cash flow
What other investment can boast that?
4. Appreciation
Choose your Birmingham investment properties wisely, and good things will happen — namely appreciation. Though the housing market has gone through a rough patch, historically, median home values have quadrupled over the past 50 years, says the U.S. Census Bureau. Appreciation means that our property’s value increases while your mortgage decreases — the perfect combination.
5. Tax Benefits
Investing in Birmingham real estate provides you with a number of tax benefits. From interest deductions to repair write-offs to depreciation, you can achieve a tax-free cash flow. Plus, you may be able to offset your other income through tax deductions. jcory