Investing (US)
Learn the 15 key benefits of investing in real estate!
The benefits of investing in real estate are many because real estates are a certainty in everyone's life. Come see 15 benefits!
Discover the best benefits of investing in real estate
We take that most people are afraid of the concept of investing. However, if you are reading this, then you would not like to be like most people. Right? So, continue reading, because we are going to give you some amazing tips that may convince you that the benefits of investing in real estate are numerous.
Although there are different types of investments, and although most people think more about the stock market, here we are going to show you some tips on the benefits of investing in real estate. Ready?
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Why is real estate a good investment?
Real estate is a good investment because it is linked to a human necessity. Unlike stocks, for example, every person needs a place to live in. Or to rent for a period of time, or to go on vacation. Do you need more reasons to be convinced? So, continue reading!
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Is real estate a safe investment?
It can definitely be. If you do it the right way! Therefore, the first thing you need to do is go study about it. Ask questions, look for professionals… Do you have a friend who has already started investing? Then, ask for advice. There is no easier lesson than learning from the mistakes of others.
15 major benefits of investing in real estate
1. Low volatility
Property investments are less volatile than other types of investments. Although they may experience price fluctuations in the long run. Depending on the economic situation, these fluctuations are less than those experienced by other types of investments.
2. Safe investment
Real estate investing protects your money from rising inflation. This is due to the fact that real estate is tangible and adds value. If you have a property in your name, you will be able to keep it even if the economy collapses.
The same may not be true when it comes to investing money in savings accounts, for example. Knowing this, real estate is the investment that has shown to be the most stable in the past.
3. Constant demand
There will always be a demand for purchasing and renting a property because of the housing deficit, that is, because there is not enough housing for everyone.
As a result, this is always a hot market, as housing is a basic need that is met even in times of crisis.
4. Passive income
Imagine having a set amount of money in your account every month without having to do anything. With real estate rentals, this is achievable.
If you don’t want to deal with the tenant personally, you can entrust everything to a reputable real estate agent for a modest percentage of the rent. Investing in rental properties, whether in residential or commercial real estate, may be a very profitable investment.
5. Potential appreciation
Real estate has the potential to increase in value in the future. As a result, you can buy a property for less than the market value in a place with a strong appreciation trend and add value to it through development and remodeling.
Pay attention to infrastructure, accessibility, location, and networks of goods and services around the property to avoid taking risks during the appreciation of value.
6. Better than the stock market
Historically, in real estate, the risk of loss has been reduced by the length of time you have owned the property. As the market improves, so does the value of your property, and you build equity as a result.
In the stock market, the risk is constant, and there are various events beyond your control that might harm your investment.
7. Steady increase
History continues to prove that the more you “hold on” to your property, the more money you will make.
Maintaining and improving the quality of the investment with renovations and infrastructure optimization, for example, enhances the value of the investment enabling even more profits to be made.
8. Tangible asset
Your land will always have worth, and your home will always have value. Other investments, such as stocks that may go to zero or a new car that depreciates in value over time, may leave you with little or no actual asset worth.
Insurance can help protect your property investment, so shop around for the finest coverage to ensure that your asset is covered in the worst-case scenario.
9. Diverse portfolio
If you’ve ever discussed investing with a financial advisor, you’re aware of the need for diversity. Asset class diversification is a critical component of lowering investment risk (or, more simply put, not putting all your eggs in one basket).
A property will always act as a safe tangible asset in your portfolio, reducing risk. Many people are able to generate financial wealth only through real estate investments.
10. Fiscal benefits
Mortgage interest, cash flow from an investment property, operational expenses and charges, property taxes, insurance, depreciation (even if the property increases in value), and other perks are all tax-deductible.
People want to take advantage of the numerous tax benefits before the end of the year, thus the end of the year is a busy time for real estate. Also, did you know that there are already companies that take bitcoins as payment for real estate investments?
11. Inflation hedging
The real estate sector’s inflation hedging capacity arises from the positive link between GDP growth and real estate demand. As economies grow, the demand for real estate rises, resulting in greater rents and higher capital values.
As a result, real estate tends to preserve capital purchasing power by passing some inflationary pressure on to tenants and incorporating some inflationary pressure in the form of capital appreciation.
12. Debt-free
According to a recent survey, 80 percent of Americans are enslaved by debt. That’s a colossal sum! Therefore, investing in real estate can free you from all debts.
13. Balanced life
If you choose to benefit from investments, you will have one less huge worry when you take control of your financial life. Also, your mental health will appreciate that.
14. Goal achievement
As abovementioned, by making more money, you will get closer to your life goals.
15. Family needs
Finally, to complete the three last benefits, and following the same logic: by making more money, you will be able to take better care of your family.
If you enjoyed our tips, don’t worry, because we have more content waiting for you!
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About the author / Thais Daou
Reviewed by / Aline Barbosa
Senior Editor
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