5 Reasons to Invest in Real Estate
Updated: Feb 16, 2019
Real estate investing – a term recently popularized by the booming housing industry and the increased demand for affordable, move-in ready homes. The risk is minimal, and the benefits are a extensive. Here are 5 reasons why investing in real estate is the best place for your money:
1. Long term investment without rapid and unpredictable changes
Compared to the stock market, investing in real estate tends to be more predictable and can be better controlled by an experienced investor. House prices can fluctuate depending on a property’s location, square footage, amenities, and the time of the year being sold. However, a real estate investor anticipates these factors by studying the areas where homes sell at higher price-points and what homeowners are looking for, as well as abiding to the best dates to buy and sell properties, making it a low-risk high-return investment.
2. Tax benefits
A property is – legally – considered to be worn down around 28 years after it was built, which means it will most likely not depreciate until after this time. In real estate, depreciation on a property means lost money, so this timeline gives you longer to benefit from your investment.
3. Passive income
When investing in rental properties, one can expect a monthly income which is to pay fully the amount invested on the unit plus a 15% profit. Although the full amount of the investment is not paid off until years down the road, the monthly flux of money can bring a larger return in the long-run.
4. Quick Return
If you choose to invest in a distressed property – which is to be flipped and sold – you will see a return to your investment after a couple of months, dependent of each individual property and situation. The percentage return on your investment can range anywhere from 30 to 70 percent – all within less than a year of the initial investment, and with little risk involved.
5. You don’t have to get your hands dirty
That’s right. Investing in real estate does not necessarily mean you have to purchase and flip or manage a property yourself. One popular option is to invest your money with a trusted and reputable home flipper. Depending on the price of the property and the amount invested, you will receive the corresponding profit once the house is sold - which is usually six months after the initial date the property was purchased for flipping.
Investing in real estate will bring you a great return.