{"id":6578,"date":"2024-08-30T15:06:28","date_gmt":"2024-08-30T15:06:28","guid":{"rendered":"https:\/\/sterlinghomesltd.com\/?p=6578"},"modified":"2024-08-30T15:06:28","modified_gmt":"2024-08-30T15:06:28","slug":"understanding-assets-and-liabilities-in-real-estate-investment","status":"publish","type":"post","link":"https:\/\/sterlinghomesltd.com\/understanding-assets-and-liabilities-in-real-estate-investment\/","title":{"rendered":"Understanding Assets and Liabilities in Real Estate Investment."},"content":{"rendered":"<p><span style=\"font-weight: 400\">Although real estate investment is a lucrative asset, there are also risks that can be incurred if care is not taken. To maximize returns and minimize losses on your real estate investment, you must be able to manage both the assets and liabilities.<\/span><\/p>\n<p><span style=\"font-weight: 400\">In this blog post, you will learn about real estate assets and liabilities and how to balance both for a profitable investment.\u00a0<\/span><\/p>\n<h5><span style=\"font-weight: 400\">Real Estate Assets<\/span><\/h5>\n<p><span style=\"font-weight: 400\">These are real estate resources such as property and stocks that yield returns. Real estate assets can be categorized into two (2), they are;<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Real estate properties; which include land, residential, commercial and industrial properties.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Real estate stocks; which include equity, mortgage security, etc.<\/span><\/li>\n<\/ul>\n<h6><span style=\"font-weight: 400\">Assets in Real Estate Investment<\/span><\/h6>\n<ol>\n<li><span style=\"font-weight: 400\">Real Estate Properties<\/span><\/li>\n<\/ol>\n<ul>\n<li style=\"font-weight: 400\"><b>Land<\/b><span style=\"font-weight: 400\">: Raw, vacant or undeveloped property.<\/span><\/li>\n<li style=\"font-weight: 400\"><b>Residential properties<\/b><span style=\"font-weight: 400\">: Mainly for living purposes such as single-family homes, apartments, or townhouses.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400\"><b>Commercial properties<\/b><span style=\"font-weight: 400\">: For business purposes such as, office buildings, and retail outlets.<\/span><\/li>\n<li style=\"font-weight: 400\"><b>Industrial<\/b> <b>properties<\/b><span style=\"font-weight: 400\">: For manufacturing, warehousing, and distribution facilities.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">2. Real Estate Investment Trusts (REITs)<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Equity REITs; income-producing real estate properties, such as office buildings, apartment complexes, retail centers, and industrial properties.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Mortgage REITs;<\/span> <span style=\"font-weight: 400\">including mortgage loans, mortgage-backed securities, and other real estate-related debt instruments.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Hybrid REITs; a<\/span> <span style=\"font-weight: 400\">combination of both equity and mortgage REITs. Which means to invest in both properties and mortgage-related securities.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Specialized REITs; investment in specific property type, such as healthcare, self-storage, or data centers.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Diversified REITs; to invest in a variety of property types, so as to provide diversification and reduce risk on investment.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400\">3. Rental\/lease income generated on real estate properties.<\/span><\/p>\n<p><span style=\"font-weight: 400\">4. Tax benefits on real estate properties, income tax deduction, low rate dividend tax, etc.<\/span><\/p>\n<h6><span style=\"font-weight: 400\">Benefits Of Real Estate Assets<\/span><\/h6>\n<ol>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Real estate appreciation; property value increases over time.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Tax benefits from owned property such as deduction on property tax, mortgage interest, etc.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Investment returns such as capital gains, etc.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Passive income from rentals, lease, etc.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Hedge against inflation; protect financial value against inflation rise<\/span><\/li>\n<\/ol>\n<h5><span style=\"font-weight: 400\">Real Estate Liabilities<\/span><\/h5>\n<p><span style=\"font-weight: 400\">These are financial obligations required to be made by a real estate property owner or investor. They include mortgages, loans, property taxes, and other financial requirements.\u00a0<\/span><\/p>\n<h5><span style=\"font-weight: 400\">Liabilities in Real Estate Investment<\/span><\/h5>\n<ol>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Property management cost include cost of repairs, major renovation, insurance and regular maintenance.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Mortgage including principal cost, interest on mortgage cost, etc.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Property acquisition loan including money borrowed from bank, relatives, etc.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Tax Rates based on the type of real estate property.<\/span><\/li>\n<li style=\"font-weight: 400\"><span style=\"font-weight: 400\">Interest Rates; the percentage returns on loan.<\/span><\/li>\n<\/ol>\n<h5><span style=\"font-weight: 400\">Conclusion<\/span><\/h5>\n<p><span style=\"font-weight: 400\">At <\/span><a href=\"https:\/\/sterlinghomesltd.com\/\"><span style=\"font-weight: 400\">Sterling Homes<\/span><\/a><span style=\"font-weight: 400\">, we are not just about selling properties, we understand that your property is more than just an asset, it is an investment. This is why we always provide tips on property ownership to ensure our property investors maximize the full potential of their property.<\/span><\/p>\n<p><span style=\"font-weight: 400\">You can visit our website at <\/span><a href=\"https:\/\/sterlinghomesltd.com\/\"><span style=\"font-weight: 400\">Sterling Homes Limited<\/span><\/a><span style=\"font-weight: 400\"> to read up on other helpful content. You can also check out affordable property available for sales.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Although real estate investment is a lucrative asset, there are also risks that can be incurred if care is not taken. To maximize returns and minimize losses on your real estate investment, you must be able to manage both the assets and liabilities. In this blog post, you will learn about real estate assets and&#8230;<\/p>\n","protected":false},"author":3,"featured_media":6580,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-6578","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/posts\/6578"}],"collection":[{"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/comments?post=6578"}],"version-history":[{"count":2,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/posts\/6578\/revisions"}],"predecessor-version":[{"id":6581,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/posts\/6578\/revisions\/6581"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/media\/6580"}],"wp:attachment":[{"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/media?parent=6578"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/categories?post=6578"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sterlinghomesltd.com\/wp-json\/wp\/v2\/tags?post=6578"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}