An investment has become the notion of the people in present days. People want to invest money so that they receive good in return and have a secure future. It is always about cash inflow and cash outflow while investment and if there is any investment stands out there that is Real Estate Investment. It has swept the mind of people with its utter relevance and significance. There are many reasons behind Real Estate Investment which are not only worth understanding but implementing as well.
Stable : The investment in the Real Estate Market is stable and balanced. It is unlike the Stock Market which can collapse on a night and you get poorer. The investment is safe and secure . There is practically little that the value of your property will be depreciated in the course of time. The impact on the Real Estate market of other factors is also very less. For example, if a Real Estate market falls in a particular city for some reasons, then that does not imply that it will do the same for neighboring city. The Real Estate is insulated from the market and that makes it even safer to invest. The price of the Real Estate on any city does not make any impact on the other cities.
Gain more leverage : Real estate is one of the few investment vehicles where using the bank’s money couldn’t be easier. The ability to make a down payment, leverage your capital, and thus increase your overall return on investment is incredible.
Investment Price : This purely depends upon your skills rather than fate. Once can get a property lesser than its original value in Real Estate. This is not possible in any other investment and that differentiates the idea.
Effective Market Hypothesis : This is one of the most famous theories in marketing and management and Real Estate stands simply ineffective. It gives the chance to get a high return on investment ratio. Nobody can dictate the price of Real Estate. It is completely on the hand of the investor and some on the situations. So, it is unlike the stock market, where a stock has a fixed value to buy or sell. The value of the investment also remains under the control of the investor. Suppose, you do a renovation in your property, it will only increase the value of the property because the maintenance is not required for the customer. This scope is nowhere present in other investments. You can simply put a garage and make yourself wealthier.
Grow, tax-free : Buying rental property based on speculation of its value is a dangerous tactic since cash flow is the key. However, appreciation over the long-run is certainly realistic and at the least you should be considering a tax-deferred strategy. The savings on the tax fronts are also very encouraging for the Real Estate.
Mortgage Interest Rates Are Low Again : Several years back when the mortgage rates hit an all-time low, people went crazy buying homes and investment properties. Some of the same people ended up getting greedy and borrowed against their new found equity, which eventually contributed to the downturn of the real estate market. Don’t repeat these mistakes.
Great Long-Term Investment : Regardless of the recent crisis like China crisis , real estate is still a good, long-term investment. If you look back 20 to 50 years, real estate is still valued much higher than it was. And if you have tenants paying your mortgage, it makes the investment that much more profitable.
Real Estate is a great investment idea if it is properly implemented. The return on investment is really very high and there is no doubt that everyone would love to invest and put efforts in Real Estate Involvement.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin