When it comes to investing your money, it’s never wise to put all your eggs in one basket. It is essential to diversify your investment portfolio, otherwise you could lose it all in one bad day in the market. So break up your investment and put a fraction into stocks, a portion into bonds, and a portion into real estate. This will improve your chances at fetching higher returns and reduce risk associated with changing trends. Unfortunately, when it comes to investing in real estate most people are intimidated by the process and often wrongly believe that it requires a huge amount. That brings us to the question at hand – Is real estate a good investment option or not? Our perspective on this subject is – Real estate is definitely an excellent investment option as it can generate continuous passive income and can be an ideal long-term investment option to add to your portfolio. You can utilise your investment in real estate as a key strategy to start building your wealth. Following below are 7 good reasons to back this opinion up that may help you arrive at the conclusion that real estate is a good investment option:
- Excellent Returns
First and foremost benefit is guaranteed appreciation of the asset value that will help you fetch excellent returns on the money you have invested into real estate. Key here is to choose a strategically located project that has ample development activities coming up around it and buying/selling at the right opportune time. So be sure to thoroughly research properties and neighbourhoods before you invest in them in order to multiply your odds of generating a profit out of them.
- Long Term Security
Real estate is a solid long-term investment opportunity, with a steady appreciation in value over the years. You can start putting money into it and if you hold it for several years you are bound to get returns.
- Passive Income
In order to build wealth, one must find a way to make their money earn for them. Investing in real estate is a wise way to make money even when you’re sleep. Not only is it a long-term secured investment, it will fetch you passive income. Whether you invest in commercial real estate or residential, you can rent out your property to tenants after doing a thorough background check. You’ll then receive monthly revenue from the investment while you wait for the property value to appreciate. If you’re buying a home for your family and you, it spares you the burden of paying rent monthly, thus reducing outflow of cash.
- Leverage Funds
When investing in real estate you are not going to be buying a property with full payment. The best thing is that you don’t have to have full cost in hand to buy it today and instead can leverage funds from sources such as banks and mortgage lenders to build your wealth and add to your real estate holdings.
Adding real estate to your investments boosts your diversification, which can protect you in times of economic turmoil. Say certain stocks are suffering because of an economic downturn. The investment properties in your portfolio might still be increasing in value, protecting you from the losses your other investments are taking.
- Protected against inflation
Real estate investments are considered protection against inflation and best options to have in your portfolio during tumultuous economic times. When the prices of goods and services are increasing, home values and rents typically increase, too. This means investment properties, during such times, will provide you with increased monthly income and appreciation, therefore protecting you financially when the costs of everything else is rising.
The benefits of owning a home are certainly not entirely monetary. When you invest in a home, you are an owner and boss of your own land/property. This sense of pride means a lot to many and brings quiet the emotional fulfilment. An added emotional advantage is that you will be able to pass on this home to your heirs, and them to theirs. Such is the permanence of investing in real estate.