Real estate investment pros outweigh cons

Dale Beede
Dale Beede

The approach of a new year affords a new opportunity to consider real estate as an investment.

If we use the tried-and-true Benjamin Franklin approach to making decisions, it becomes clearer to see why a real estate investment in 2015 might make sense. So bear with me as I review some of the pros and cons of an investment real estate purchase.

Here are some pros:

The Western Colorado real estate market seems to be properly priced, especially compared to the robust Denver area market. This is a great time to buy in Western Colorado.

Interest rates might never be lower.  Loans on investment properties are readily available with good credit and a 20 percent to 30 percent down payment.

Investment real estate still carries tax benefits, including allowable depreciation of the improvements and capital gains tax treatment if held for longer than one year and one day.

Real estate offers a hedge against inflation.

Real estate could earn you a return, monthly and annually, that far exceeds the interest earned on savings and money market accounts.

Real estate may be professionally managed, allowing someone else to handle the headaches.

Properly managed real estate could offer you years of passive income while protecting your “nest egg.”

Compared to common stock ownership, real estate offers an investment you control, not the chief executive officer of a company who doesn’t know you or your financial needs.

Now, here are some cons:

Real estate is not liquid, like cash, stocks and bonds. Some planning is important when selling real estate.

All markets, real estate included, rise and fall over time. We can never be 100 percent certain we’ll profit on any investment.  Still, more millionaires in the United States have made their fortunes through real estate than any other investment medium.

As you can see, this simple investment decision tree points to far more pros than cons of why an investment in real estate in 2015 could make sense for you.

As always, though, we recommend you consult with legal and tax advisors prior to embarking on an investment real estate purchase.

Meanwhile, happy holidays from all the professionals at Coldwell Banker Commercial Prime Properties.