Creating value in real estate is not a mystery. In part 2 of this series we will look at several additional ways in which we at Rho Orion Investments Inc.recognize and create value in real estate.
- Tax Benefits–There are many tax advantages unique to Real Estate. While individual purchases may vary, almost all purchases offer capital depreciation, deductibility of expenses and deductible mortgage interest.
- Tangible, Concrete Asset– Investors are purchasing a real interest in a real asset with underlying value (land, improvements and chattels) independently verified by a state agency through property tax assessment, market comparables and simple business evaluation tools. Unlike a stock or mutual fund whose value lies in its perceived trading value, Real Estate has real value. Unlike other investments, a Real Estate investor is buying an operating business with a historical operations record. The business and the underlying asset (the buildings, rental contracts, incomes and expenses) can all be evaluated, measured and compared to arrive at a reasonable purchase price. Who among us can predict a stock or mutual fund with the same certainty? Recent records show that not even professional brokers and agents can.
- Property Management–Due to the number of units in an apartment building we can afford to have professional property management that handles the on-site and tenant matters. Good management reduces risk, increases value, foresees and mitigates problems and ensures that tenants and investors sleep well every night.