Property investment has always been — and still is the best — least risky investment!
While there are many types of investments, such as stocks, bonds, investment funds, commodity futures, and security futures, investing in real estate is generally regarded as being the most stable in the long term.
Aside from the very low risk of a sudden drop in the value of your property the advantages of owning a physical asset are numerous.
On the outside chance that you need convincing, we’ve grouped them into five essential benefits.
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You Are the Boss
Investing in financial markets means you generally entrust your money to brokers. The great part about real estate investment is being your own boss.
You are the one who decides which property to invest in, and which property financing method to opt for. You also get to decide on your tenants and the amount of rent to charge, as well as who will manage and maintain the property for you too.
Oh, and since investment is a buy-and-sell business, you get to decide when to sell your property.
Many people invest in real estate as part of their retirement plan, or as a kind of disaster-prevention fund. Likewise, there are home buyers prepared to pay cash for homes at fairly short notice. It’s at times like these that you will be glad that you invested in real estate in the first place.
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Income Generation
Making money is the main reason to invest. Every investment should give you a return on investment (ROI) which you can either save or reinvest.
The steady cash flow from monthly rent is one of the most attractive aspects of real estate investment.
Rental should cover expenses such as mortgage payments, property taxes, and maintenance costs. The key to real estate investment is investing in a sound property, to begin with.
Advice from realtors and real estate agents is often helpful in pointing you in the direction of possible good investments, but ultimately, the decision is yours.
This might be a good time to get the distinction between real estate asset managers and real estate property managers straight.
If you’re looking for someone to collect rent from tenants and handle property maintenance issues on your behalf, then what you need is a real estate property manager. Having a property manager is especially useful if where you live and your real estate investment are in locations far apart from each other.
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Tax Benefits and Deductions
Cash flow from an investment property is tax-free.
Property investors are able to deduct almost all expenses related to owning and managing an investment property. Deductions include property taxes, mortgage interests, insurance, maintenance repairs, travel expenses, and legal fees. Besides, rental income is not subject to self-employment tax.
When property investors sell the real estate investment and reinvest the profits, do not pay capital gains tax.
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Hedge against Inflation
Investment property prices have historically kept pace with inflation. There are three advantages to this particular benefit:
- Real estate investors can increase the amount they charge for rent as inflation increases.
- The value of your property goes up enough to cover any increases in inflation.
- Mortgage payments are not affected by inflation, meaning their absolute value decreases with inflation.
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Real Estate Appreciation
Real estate is not a short term investment plan.
The chief benefit of investing in real estate is the appreciation of capital assets, i.e., land, over time. In other words, your property’s value will be worth much, much more 30 years from now.
Ease in Gently – Read All About It
Everyone knows that the best investors keep themselves constantly informed about business and financial matters. They become familiar with the territory to make the most of their assets and prevent themselves from doing something rash.
Feel free to search our newsfeed for up-to-date articles, especially if you are a first-time real estate investor. Keep your eye on the property market. After all, one of the secrets to successful investment is investing when the time is right.