Real estate investment has been a major factor in creating 90% of the world's millionaires. It is one of the most effective wealth creation vehicles and an important component of a well-diversified portfolio. Ninety percent of all millionaires become millionaires by owning real estate, and more money has been made in real estate than in all industrial investments combined. Today's wise or salaried young man invests his money in real estate. People who end up being millionaires tend to do so by starting their investment regimes at an early age.
You need proper planning, education and having strategic alliances with good advisors. For the rich, having a large part of their portfolios dedicated to real estate investment is a must. It's a well-known fact that 90% of the world's millionaires have made their fortune with one-off investments by buying, selling and renting properties. According to billionaire Andrew Carnegie, 90% of all millionaires reach that level of wealth through an investment in real estate. He also stated that “more money has been made in real estate than in all industrial investments combined. Since rental income from real estate investments is often considered passive income and is exempt from self-employment tax, corporations and unions are a popular structure among passive real estate investors.
A real estate investor who generates income from a rental property can deduct depreciation expenses from their taxes, which reduces their tax liability and their taxable income.
7 Reasons Why Millionaires Invest in Real EstateThere are several reasons for that, but here are seven reasons why millionaires invest in real estate:
- Tax deductions: As a real estate investor, you can claim tax deductions on various expenses incurred for your portfolio.
- Passive income: Rental income from real estate investments is often considered passive income and is exempt from self-employment tax.
- Long-term value: The value of neighborhoods can change, but unless you sell at the wrong time or borrow too much capital from your property, it's hard to lose money on your real estate investment.
- Diversification: Investing in real estate is a reliable wealth-building strategy and you certainly don't have to do all the legwork yourself.
- Expertise: All Frank Salt Real Estate agents are highly trained and know the areas in which they operate.
- Rental opportunities: You can determine what type of real estate investment you prefer, such as renting to students in a university city or renting rooms.
- Long-term commitment: Another small detail that Cross revealed was the value of real estate investment when dedicated to it in the long term.