Benefits of Investing in Real Estate

Most people are already investing in real estate, when they purchase a primary residence. We all hope and assume that when we sell it down the road, the property will have appreciated and we will have a profit. But this is the only a one-time profit.

When you invest in property held for investment purposes, whether that is a rental house or a commercial asset, there are a number of advantages for that property owner. Here are just a few.

PASSIVE INCOME

Renting real estate can be a way to make a little extra money on a monthly basis. As you increase the amount of properties that you own, you may find that this will be your new career managing your own properties, deciding who to rent to and how much to charge for your rent.

TAX BENEFITS

Owners of rental properties can deduct certain expenses on the properties, such as mortgage interest, maintenance costs, travel costs, and others. As a rental property owner, you should speak with a tax professional to ensure that you exhaust all resources before filing your yearly taxes.

And when you do sell this asset, you would be eligible for the 1031 Exchange, which would allow you to defer your taxes upon the sale of the property, as long as you follow the rules of the 1031 Exchange.

WONDERFUL MARKETS FOR RENTAL PROPERTIES

Over the last 3 years, home ownership has declined. Per the US Census Bureau, as of Q4 of 2025, 65.1% of American households own the home in which they live. In a few states, those numbers drop significantly. New York is at 52.2%, California is at 55.3% and Hawaii is at 60.6%.

Many people are choosing to rent today rather than buying. Some of the more common reasons are the flexibility to relocate and not having the responsibility of maintenance on the property. Of course, with the increase in home values, home ownership is just not an option for everyone.

These are just a few of the reasons that we see individuals investing in real estate. And when they do, they reach out to us here at Security 1st Exchange when they sell that investment so that they can be guided through the 1031 Exchange process for the deferral of their tax liabilities.

Feel free to reach out to us here at Security 1st Exchange for additional information on the 1031 Exchange.