Investing in real estate is a mix of buying, selling, and managing property. As simple as it may sound, this is a huge responsibility and real estate law in Illinois can be very complex. Buying a property, fixing it up, and renting it out takes blood, sweat, and lots of money. But when done properly, your investment property can bring in passive income and will undoubtedly become your biggest asset! Investment properties are one of the best financial assets one can land on.
Is 2023 a great time to invest in real estate? The mortgage rates are at an all-time high and house prices have risen as well. Compared to 2020 and 2021, the mortgage rate has increased from 3% to a whopping 5.5% for a 30-year fixed mortgage. Real estate is a sound investment that will withstand the test of time. It’s a physical asset that only gains value over time, so there is no good or bad time to invest in a property—even as the trends of the housing market change.
“Although there are risks associated with investing in real estate, there are things you can do to reduce these risks, like conducting thorough research, hiring a property manager, or simply just staying informed.” Poplar
Investing in real estate is an excellent idea for broadening your financial portfolio! It’s a long term strategy that takes patience to see results. We’re here to help you understand a bit about the real estate market before jumping in. Getting a professional real estate law expert onboard is the best to understand the real estate legal jargon, zoning laws, landlord laws, and more. With our expert attorney Ben Weaver, you can sail through this process with confidence!
There are many ways to go about it; for one, you can buy a single-family home, fix it, and rent it out to get a steady monthly income. With rental rates on the rise, this isn’t a bad option. When the time comes, and your house’s value has doubled, you can collect a heft ROI and invest in your next property.
The second option is to invest in something bigger, say an apartment building, and collect a more steady income. You won’t need to sell this property as this one is going to your big earner.
Read on the learn the many benefits of buying property as an investment…
Four Reasons Why You Should Invest in Real Estate in Illinois
1. Great Potential for Appreciation
Real estate may be the only asset that gains value over time (apart from vintage cars). Not only does it gain value, but it can also become the perfect source of passive income. Properties purchased ten years back have now doubled or tripled in value. Someone who bought a house in 2011 at around $310,000 can expect to get more than or equal to $749,000 today. Despite the inflation, your home will stand to gain value, and when the time comes to sell, you can reap the sweet ROI on your investment property. It’s your hedge fund that you can cash in at any time.
2. Cash Flow
Investing in real estate can be an excellent way to generate cash flow. Unlike other types of investments, such as stocks or bonds, real estate has the potential to generate income in the form of rental payments. This means that as a real estate investor, you can earn a regular stream of passive income from your properties. Fix up your property for commercial use and rent it out. It will give you a steady cash flow. The extra cash coming in every month can be used in many other small investments till your investment matures enough for a profitable sale.
3. Tax Benefits
Among the many pros of buying a home, there are tax benefits. Did you know your investment property offers a variety of tax benefits? For example, deduction for mortgage interest and deduction for property deprecation. If you make use of these tax benefits, you can considerably lower your tax bills. Not only that, but you can also use the tax deduction on depreciation to reduce your taxable income. It helps you keep a sum of your hard-earned money intact. Other expenses that you can write off are,
- Origination points paid on the home loan
- Maintenance expenses
- Real estate taxes, homeowner’s insurance, and HOA dues
4. Shield Against Inflation
Investing in real estate can be a good way to shield against inflation because real estate is a tangible asset that usually appreciates in value over time. Inflation is the general increase in prices of goods and services over time, which means that the purchasing power of your money decreases. However, real estate tends to appreciate in value over time, which means that its price rises along with inflation. This can help to protect your investment against inflation. Real estate can provide a hedge against inflation because it is a hard asset that has intrinsic value.
As a first-time property owner, here are a few tips that will help you get started:
- Do your research! That means picking optimal timing and market to land your investment. If you aren’t sure about the real estate market trends, hire a professional. Hiring an expert may seem like an additional cost, but it will be worth every last dollar.
- Invest in safe neighborhoods. It is easy to research. Look out for gated communities, homes near schools, hospitals, and entertainment hubs, and especially look for low crime rate neighborhoods. Such neighborhoods tend to get higher rent rates, and you will have lower vacancy rates.
- Understand the cost and responsibility of buying property. Yes, there are hidden costs; there will be maintenance, repairs, and many other costs you may or may not know about. So, ensure you are fully aware of all these when you decide to put your hard-earned money into real estate.
- Partner with a trusted real estate attorney like Ben Weaver to protect your assets and provide legal advice every step of the way.
“It was a pleasure to work with Ben Weaver and the entire 23 Legal team! Ben is highly knowledgeable, very responsive and made both the process of closing on a home sale and purchasing a new home, go very smoothly! All in all, I highly recommend Ben and his team!” – Client Testimonial
Invest in Financial Success with 23 Legal!
Investing in property can be a complex and risky process, which is why many investors choose to hire a trustworthy real estate attorney to help them navigate the legal landscape. An attorney like Ben Weaver can ensure that all legal documents and contracts related to the investment are clear, fair, and legally enforceable.
The 23 Legal team will help you understand the various regulations and laws that apply to your investment. This can include zoning laws, environmental regulations, and tax laws, among others. And lastly, we’ll provide valuable guidance and advice throughout the investment process. This can include helping investors choose the right type of investment, negotiating deals with sellers or buyers, and providing strategic advice on how to maximize the return on investment.
Buying an investment property (especially as a first-time homeowner) isn’t a piece of cake. With an expert team like 23 Legal guiding you every step of the way, you can rest assured you’re in good hands! Get all the help you need with price negotiations, zoning issues, or closing on your properties. Contact attorney Ben Weaver today!
Accomplish your real estate goals with 23 Legal: (847) 447-6004
Why Choose 23 Legal
23 Legal offers Real Estate and Estate Planning legal services to individuals, families, community associations and small business owners throughout Chicagoland. We know how intimidating “the law” can be. In fact, when most people think of law offices, they think of stuffy leather chairs, huge wooden desks and pompous lawyers who charge outrageous fees. That’s not us! We believe in 1-to-1; the same lawyer should work with you all the way through. Whether you have an estate planning issue, family trust concern, or you have a legal problem in regard to a new home, business, real estate or remodel, you need a lawyer who cares. That’s where Ben comes in! We are great listeners; more than that, we are lawyers who believe that our clients always come first.