by : Stephen Campbell

A growing number of people are investing in real-estate and land these days in the hopes of getting a bigger profit. The benefits of investing in these two sectors has long term benefits as the prices of land and real estate keep rising and while you own these properties you can lease them out and earn profits currently till the prices rise sufficiently for you to sell them and make larger profits.

You can invest in real estate and land only if you have a good amount of money to invest. Recently many people are becoming aware of using IRAs to invest in residential real estate and commercial estates. However investing with IRAs prohibits you from using the real-estate you purchased for your personal use such as a vacation home or office.

Content

Many people have become millionaires by investing in real-estate and land. The advantages of such investments are that you can avail of leverage to borrow large sum of capital or money to purchase assets and can use the cash flow to pay off your debts. Secondly you can depreciate the value of the real-estate asset to avoid paying tax on profits. One of the biggest advantages of investing in real estate is that you can do this in your spare time and if purchased and managed properly it has the ability to generate consistent and substantial cash flows to make your lifestyle comfortable.

Real investing in multi-unit buildings is a great way of creating wealth and cash inflows. You should learn the advantages of investing in real-estate and land as compared to other investment options then you will realize the potential of this investment. You must also learn different ways of adding value to your property or land to make it an attractive proposition. Holding on to investment properties for the long term can be a favorable option if the property or land prices decline.

Conclusion

There are a large number of real estate and land properties but you need to know how to locate the profitable properties and to invest in those that will have long term growth potential. You should understand how the real estate tax affects your profits and how to avoid taxes in order to maximize your real-estate returns. A few people use the money in their IRAs to buy real estate however you should be careful as a mistake can disqualify your IRA tax deferred status forcing you to pay tax on the penalties.

Owning property inside an IRA forfeits the traditional tax advantage of investing in real estate and you cannot deduct the taxes or interest or use depreciation. There are many success stories of people who have made it big by investing in land and property but you need to know how to take advantage of the market, when to buy and sell, when to hold on to the property and wait for the prices to increase substantially before selling and more.