Investments are ways to put your money into something, be it a financial or a physical asset that grows your money with a guaranteed rate of return. The market is booming for investments, and common people feel confused about where to pool in their hard-earned savings. Some of them turn to financial advisors to check the best options for investment, whereas some resort to educating themselves with books and the internet. Research reveals that unlike investments in any other option, Real estate investment fetches better returns and is the safest. In countries like the US and India, most people bet on real estate to be the best long-term investment as it is risk-free. The article below will provide you with facts on why you must invest in real estate right now!
What is Real Estate Investment?
Purchasing, managing, renting real estate properties for profit, or selling home for cash is termed as Real Estate Investing. Examples of real estate properties are Residential properties, Office Premises, Commercial Land, Agricultural Land, etc.
Top 9 Reasons to Invest In Real Estate
1. The Many Uses Of Land
Land is one of the most profitable assets to own or invest in. The reason being the demand for land will never decrease. Since the population is ever rising, demand for land is rising, and hence the price keeps rising. If you check the land cost ten years before and compare it with current rates, the prices have experienced a growth of more than 4000% in some cases. Additionally, many other uses of land imply it can never be a bad investment.
a. Unused land can be used for creating a commercial/residential property and can be rented.
b. You can convert it for agricultural use and live off the produce.
c. Even when unused, land can be kept for inheritance by the next generation of your family.
2. The Tangibility Benefit
The various investment options available in the market are primarily intangible assets. Example: stocks, funds, bonds, or savings; however, real estate is a tangible investment to own. Even when you feel you aren't making any profit from the land, you can build your primary residence there or sell the property to earn a profit. If you lose money on your stocks and bonds, there is nothing to rely on, but you are still left with the physical property if you lose money on real estate.
3. Safer Investments
You can make money from real estate without owning it through brokerage, trust, etc. While investments are subject to market risks, real estate investments are less volatile than intangible investments. Stocks are the most volatile, which implies the rate of making money and losing money is almost unpredictable. But you can predict the criteria to a certain extent in the fractional real estate investment, making it one of the safer investments.
4. Untouched By Inflation
The value of land keeps appreciating over time; hence it is one of the income protectors during times of inflation. Real estate appreciation overcomes inflation blues by making a quick profit. Although economic inflation negatively impacts other investment options, real estate does not suffer from it. Instead, it results in appraisal to combat the adversity. This also makes it a risk-free investment.
5. Long Term Benefits
Real estate properties appreciate in the long term and are considered the best investment option in the long run. Although the prices don't rise significantly every year, the amount appreciates greatly in a matter of years. Since land is a limited resource and its demand keeps growing, you can be assured to reap more than a generous profit in the long run.
6. Steady Income
Real estate investment is stable as it is less volatile than other intangible investments. Even in the short run, you can fetch a steady income if you plan the investment well. Utilizing the property for rent, you can get a monthly income that may not be guaranteed in the case of stocks, bonds, or deposits.
7. No Need of Financial Expertise
To be a real estate investor, you need to know the property's current market price, resale value, rent based on location, and purchase price. Apart from all this information, the trends in real estate industry can be analyzed through common sense. Also, good networking can help you earn better profit in your real estate property. However, to invest in stocks and deposits, you need to know about interest rates, market volatility, companies' performances, etc. There is no need for such financial expertise in real estate investing, which implies it is accessible to everyone.
8. Mortgage Benefits
Real Estate Investment becomes a savior when you need a loan for education or other venture. It is accepted as a mortgage instrument and collateral in financial institutions. Hence real estate is the best long-term investment. Also, the maturity period is not fixed here by compulsion; it depends on the owner when they would want to sell it.
9. Tax Benefits
Real estate properties are subjected to certain tax exemptions based on the Income Tax Act,1961, and it depends on what kind of property you have invested in. Also, tax rates on real estate investments, in the long run, are relatively lower than the other investment options.
Combating The Drawbacks
There is much more to real estate investing than just the benefits. The challenges of real estate properties are many, like less liquidity, more management, and increased liability. In fact, investors need to assess the market prices efficiently to invest in better projects and locations, and most investors fail to figure out the right time for investment. For such cases, wise investing is required. It implies decisions like collaborating with a friend to join investment, using the property as collateral for loans, and checking out the location before investing.
With proper planning, real estate investment can prove to be one the best long-term investments and earn brilliant profits.
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