| Most often, real estate investors are the ones who | | | | living. The consistency of the long-term record is |
| think ahead and have a vision for the long term that | | | | reassuring. The historical increase in prices, when |
| can recognize the importance of planning for their | | | | compared to other popular ways to invest such as |
| retirement. They also know that they cannot rely on | | | | the stock market, has been predictable and stable. |
| Social Security for their retirement income. It simply is | | | | Inflation is a force that erodes an investment |
| not sufficient and, by retirement age, who knows | | | | portfolio's value, often producing losses in real |
| how that program will have altered? | | | | spending power above and beyond after-tax profits. |
| Unless you have an superbly generous retirement | | | | Real estate, with its combined solid market |
| program, you will need to plan for the long term. You | | | | performance and annual tax benefits, overcomes this |
| will responsible for your financial freedom in your | | | | chronic problem faced by many investors. |
| retirement years. It may turn out that real estate is | | | | 4. Real estate is a secure investment. Buying real |
| one of the most excellent ways to plan, for 5 | | | | estate is one of the most secure ways to use and |
| reasons: | | | | protect your capital. Market and investment risks are |
| 1. Tax benefits encourage equity growth. The tax | | | | slight compared to other long-term investments. Cash |
| code encourages investors to use real estate to | | | | flow risks can be mitigated with larger down |
| encourage equity growth. The like-kind exchange rule | | | | payments, or through seeking properties that |
| helps investors hold their capital invested and prefer | | | | produce positive cash flow. And the higher your tax |
| cash flow over capital gains. None of your equity has | | | | rate, the better your tax benefit, meaning that |
| to be relinquished in the form of taxes. Your rents | | | | after-tax cash flow is affected directly. Real estate is |
| are further sheltered by depreciation. In comparison | | | | also safe because it can be insured. Homeowner's |
| with other retirement plans, such as individual | | | | insurance is not only required, it is one of the ways |
| retirement accounts (IRAs) and pensions, in which | | | | that your investment is protected from risk. |
| income is taxed as it is withdrawn, real estate is | | | | 5. Real estate can be used for retirement housing. |
| much more flexible, allowing you to borrow based on | | | | Your investment can be maintained over the years |
| invested equity and enabling you to manage your | | | | with tenants paying your mortgage while you benefit |
| capital without the rules of other plans restricting | | | | from the annual tax advantages; and then, on |
| access. | | | | retirement, with your mortgage paid off, the same |
| 2. You can time your debts. You have several control | | | | property can be converted to a primary residence. |
| over the timing of mortgage debt. You can pay off a | | | | Thus, you can live mortgage-free in your retirement. |
| mortgage in coordination with a planned retirement | | | | You will probably not find any investments offering |
| date, and the longer you have to plan, the easier it is. | | | | high safety and low risk that compare with all of the |
| With mortgage acceleration, you can calculate so far | | | | advantages of real estate. This point - valid |
| ahead that you can have your debts repaid in the | | | | comparisons of safety and risk - often is overlooked |
| exact year you want to retire. And you do not need | | | | by investors and almost always ignored by financial |
| to refinance. Simply calculate the payment you have | | | | planners. Whenever you hear the advice to forget |
| to make each month to prepay your mortgage by | | | | about accelerating your mortgage and instead put |
| the planned date. | | | | the money in to some higher-yielding investment, |
| 3. Real estate values have surpassed inflation. With | | | | always make sure the comparison is a fair one that |
| the exception of a few economic downturns, real | | | | includes relative risk levels. Make valid comparison |
| estate surpasses inflation most of the time. On | | | | before taking advice. |
| average, real estate is certainly ahead of the cost of | | | | |