Right now, it seems as though the real estate market is too unpredictable to take any risks. Maybe you’ve been thinking about investing in real estate, but the timing doesn’t seem right. While it’s impossible to eliminate an investment’s risk, investing in turnkey single-family rentals is one of the best choices you can make for your financial future.
3 Reasons to Invest in SFRs ASAP
#1) Waiting is costly.
Becoming successful as a real estate investor takes time. Both building equity and appreciation demand years of ownership, improvement, and renting to reap the full rewards. The longer you wait, the further behind you’ll be. Scaling as an SFR investor can be a slower process, too – you want as much time as possible to grow your investments on your time. Securely and unrushed.
#2) Demand is unprecedented.
Demand for single-family rentals has been on the rise for years. Currently, the American SFR market is worth a shocking $4.4 trillion. It was the most resilient real estate investment to come out of the pandemic and, as inflation and housing costs rise, it will become an even more instrumental part of the landscape. Investors would do well to capitalize on this demand!
#3) Timing the real estate cycle rarely works.
You might be tempted to try and time the real estate market. After all, it does move in cycles. However, those cycles aren’t always predictable. You could wait years, even decades, for the “right time” to come along. Waiting only results in missed opportunities.
Advantages of SFR Investing
Advantage: Accessibility
Turnkey real estate is one of the most accessible forms of investing out there. You don’t have to have prior experience in real estate to be successful, nor do you need to know how to be a landlord. Turnkey investors rely on property management teams to run your properties smoothly and collect rent from reliable residents.
Even in a heated real estate market, turnkey providers provide access to hand-picked properties – saving you the trouble of bidding wars in over-inflated real estate markets.
Advantage: Passive Income
There’s no one advantage to investing in real estate that makes it worth your while.
Instead, a multitude of advantages come together to make investing in real estate irresistible. Passive income is just one of those benefits! As an investor, the passive income generated by your residents pays for your mortgage over time. Ultimately, this allows you to leverage both money from the bank (the mortgage) and money from your residents (the rent) to grow your net worth and equity over time.
Someone else pays your mortgage for you – and you reap the rewards.
Advantage: Appreciation
Over the past few years, real estate appreciation has been too big to ignore. Most markets in 2021 rose in their real estate worth by double-digit percentages! Appreciation happens naturally over time, but investors can force appreciation through property improvements as well. Increasing the value of your property increases equity.
A long-term buy-and-hold strategy empowers investors to take full advantage of this appreciation, whether they opt to execute an exit strategy or pass their properties on to heirs.
Advantage: Tax Benefits
Uncle Sam favors long-term investors. The tax benefits for investors are vast, including annual tax breaks related to depreciation, management and repair costs, mortgage interest, pass-through entities, and the deference of capital gains taxes.
There’s the 1031 Exchange, which allows investors to essentially trade up for a like-kind investment of equal value while deferring capital gains taxes. And, should things go poorly, you can write off up to $25,000 in losses.
Advantage: Hedge Against Inflation
Inflation is at a crushing 40-year high. Every American family on a budget, big and small, is feeling its impact. Inflation eats away at the value of the dollar – hurting your savings accounts, stocks, and 401ks. Your money just winds up being worth less. That isn’t the case with real estate, which is a historically proven hedge against inflation. That is, the value of real estate tends to increase alongside inflation, helping you retain your wealth.
The longer you wait to invest in an inflation-resistant asset, the more inflation will eat into your wealth.
As a real estate investor, you’ll not only benefit from appreciation to ward off inflation, but you’ll generate additional passive income to build your wealth despite the state of U.S. economics.
Join thousands of buy-and-hold investors building world-class real estate portfolios with REI Nation!
