If you’re looking for investment opportunities, real estate is the way to go.
Real estate is a significant investment when done correctly. As with all investment opportunities, there are risks in the trade, but the pros outweigh the cons 95% of the time. If you have enough capital, it’s always recommended investing in real estate rather than higher risk or volatile opportunities like stocks.
Land rarely decreases in value unlike a car, a new expensive phone, laptops or any tool or gadget. For most people, investing in real estate is a top priority. Real estate investments in places like Centennial, Colorado can even pay for themselves if you rent them out. Here are the benefits of investing in real estate and why you should invest in it rather than other investment forms like bonds or stocks.
Real estate investments protect against inflation
Real estate investments protect against inflation as the value of real estate rises as time goes by. If you’re renting your property out, the overall income also increases as inflation and the cost of living rise. You’re not losing any money or asset value as inflation rises. As currency value goes down due to inflation, a fixed income especially for retirees won’t get you as far as it used to so investing in real estate that rises in value is indeed a hedge against inflation.
It builds equity
Another advantage of investing in real estate is that you can build equity. As the value of real estate rises, so does equity. Let’s say the value of your real estate is at $80,000 and you only owe $40,000 on your mortgage. Your equity is at $40,000 as that is the difference between what you owe on the mortgage and the fair market value of your investment.
While paying off your mortgage, your equity also increases but it can also increase with the rise of the market value of your property. Let’s say you still owe $40,000, but due to any number of factors, the fair market value of your property suddenly rises to $100,000 you now have a $60,000 equity instead of the previous $40,000.
Rising market value
The main reason why any of us would be interested in purchasing real estate is the rise of the property’s value. This is true for any other investment. What’s special about real estate is that it rarely decreases in value. The only reason you can lose money on your investment is either due to poor choices in location or unavoidable reasons like sudden damages to the property due to natural causes. As land is at a premium everywhere, real estate may be one of the safest ways to invest and earn money.
Not only does your property increase in value over the years but it also provides a stable income from renting out your property. If you’re thinking of selling your property, you should consider taxes and other fees and expenses like repairs and renovations to make sure you’re making a profit instead of taking losses before selling.
You can’t go wrong with investing in land
Investing in real estate takes a lot of initial capital, and you may have to take a loan to start your investment. But investing in real estate is a lot safer than the stock market which carries the real risk of bankruptcy.
Also, if you’re buying and selling real estate, it’s recommended to buy property in developing areas. For example, you can get two houses in a developing suburban area for the price of a small apartment in a city like Manhattan.
If you’re thinking of investing in real estate, look for expert advice before you do, their assistance and advice will prove invaluable in choosing which property to buy. Some firms even facilitate loans to get you started.