When people think of investments, the first thing that comes to mind is any form of financial securities such as stocks or bonds. Real estate is as viable an investment as those, and probably even more. Here are 5 reasons why you should consider steering some of your monetary resources towards real estate investments:
Tangible Asset Value:
“Real estate is as real an investment you can get,” says Eugene Birikorang, Sales and Marketing Manager of Devtraco Plus. To most people, seeing is believing; their confidence in the reality and stability of a thing is affirmed by tangible proof of its existence. Unlike investments such as stocks, bonds and treasury bills that are intangible, real estate is a strong and sturdy asset of value that is backed by physical proof of brick and mortar. Why not ease your uncertainties with an investment you can always make physical reference to?
Ongoing Income Source:
Any investment you make should have the ability to provide you with returns in the future. Real estate is one that gives you an opportunity to make your money back through the resale or renting out of your property. The flow of cash from real estate is mostly stable and more predictable than other businesses. It can help float you through the bad times and live well during the good times. The revenue you make can serve as revenue for building other businesses or re-investing more in real estate.
Long term appreciation:
Real estate is an investment that lasts relatively long. With proper care and maintenance, the longer you keep your property, the more it appreciates. Over time the value of your property rises due to changes in the real estate market or the urbanization of the location in which your property is situated. After some years, say 10 or 20, the worth of the property will be far more than what you are paying now. You will automatically be building wealth over the long- haul. This business is for life!
Diversifying a portfolio is one of the most advised tactics when it comes to active investments. It reduces the likelihood of you making significant losses, should the market move unexpectedly downward. Real estate has a very low / negative relationship with other types of investments and securities. This means that while those may be doing badly on the market, your real estate investment will be doing quite the opposite. As an active investor, you might want to reduce the volatility of your investment portfolio by diversifying it with some real estate investments.
While most people obviously fear inflation, for a property owner, it is something you should look forward to. When the price of a bag of cement shoots up, guess what is also going to shoot through the roof? Everything real estate and construction related, which includes rents and property value. This ability of real estate to be hedged from inflation comes from its positive relationship with the GDP of a country. When the economy is growing, the demand for real estate also increases alongside. This in turn increases rent prices and raises your capital values. You pass on any inflationary pressure to your rent tenants or the buyer of your property, as capital appreciation, rather than bear them yourself.
For an investment that serves as a tangible asset which provides ongoing streams of income over the long haul, protects you from inflation and keeps your investment portfolio afloat, real estate sounds like the perfect investment choice. Start off on this path by purchasing a piece of property today.