Are you thinking about investing in real estate? That’s a wise decision. In fact, luxury real estate is probably the most reliable type of investment you can have. According to a recent CNBC article, many millionaires say that real estate is not only one of the best investments you can make, it has gotten them to where they are today.
There are several good reasons why luxury real estate is a solid investment. From tax breaks to portfolio diversification, the risks may far outweigh the rewards. If you still have your doubts, here are the top five reasons why you should invest in luxury real estate in Philadelphia at this moment.
Reason # 1: It’s a Predictable Cash Flow That Appreciates in Value
Perhaps the most obvious reason to invest in luxury real estate, it gives you a steady source of income. This can be important, especially in retirement. If you’re looking for a source of revenue to replace your weekly paycheck, then your best option would be a real estate investment.
Not only does real estate provide money in your pocket, but it does appreciate as time progresses. Since real estate value and rent increase over time, if you invest well you will make a nice profit when it’s time to sell the property.
Take the story of self-made millionaire Sean Conlon. Using the money he saved while working as an assistant janitor, he bought his first apartment and made a tidy sum of $4,000 after selling it a few years later. From that sale, he bought more and more real estate until he finally became a millionaire.
Reason #2: It Provides Equity Buildup
When you make the initial investment for real estate in Philadelphia, you may find it difficult on your finances at first. But as you continue paying down your mortgage, you will soon see a buildup in equity — an asset that’s part of your net worth. This will allow you to improve your portfolio so you can purchase more properties, which leads to an increase in your cash flow and building your wealth.
Just remember that receiving the benefits of your investment will take time. If you’re looking for a quick turnaround, then this may not be the right investment opportunity for you.
Reason #3: It’s a Tax-Deductible Investment
There are a number of tax breaks available for those who invest in luxury real estate in Philadelphia, including but not limited to owning, operating, and managing a property.
Reason #4: It Can Be Used as Leverage
In the case of real estate investments, you can use the property as leverage. What this means is instead of paying full price for the property, you can put down a fraction of the cost and then use borrowed capital, such as a mortgage, to pay for the rest of the investment.
This is beneficial to the investor because you only pay a small portion of the property, yet you will still be able to reap the rewards. You can keep all the income, write it off on your taxes, and get the equity buildup.
Reason #5: It Diversifies Your Portfolio
And finally, having an investment in real estate can add some diversification to your portfolio. It’s important to diversify your portfolio because it lowers the risk of your capital by not having all your capital in one place.
Unlike other investment opportunities, real estate has a low and sometimes negative correlation with other asset classes. This means that by investing in luxury real estate, it will lower your portfolio’s volatility, which in turn, lowers the risk.
How Maxwell Realty Can Help With Your Luxury Real Estate Investment
If you’re ready to invest in luxury real estate in Philadelphia or are looking for a partner to help sell your investment property, turn to Maxwell Realty to handle your real estate needs. With over $3 billion in real estate transactions and over 50 years of experience working with landlords and property managers, we have the knowledge needed to handle your property.
Not only can Maxwell Realty get you the tenants needed for your luxury real estate investment in Philly, but we can also manage your building. And thanks to our niche, off-market business, this enables dozens of investors each year to not only fix and flip investment properties but also accumulate critical mass, allowing you to purchase more properties and gain wealth.
With our connections and experience, we will get you the maximum return on your investment. Contact us today for more information.