The investment landscape is a wide one. There are enormous assets to invest in that vary from bonds, mutual funds, cash, stocks, and real estate.
However, as much as diversifying your investment portfolio is essential, the guiding principle for a long-term yield and avoidance of the risk of major loss still set the pace for major investment decisions. You are guaranteed long-term investment yields and mitigated risk, with a well-chosen asset as real estate.
Still, in doubt, these robust reasons will drive you into an investment plan in real estate.
Stable cash flow
Positive cash flow is streamed in from a good investment. Cash flow is the amount of profit you earned each month after the income collected, operating expenses paid, and cash has been reserved for future repairs.
After all, you want to earn more money than your spending, at the end of the month, right? Investment in real estate has the advantage of expected cash flow from rental income. The high demand for accommodation in a growing inflated economy triggers rent prices to always be on the rise.
Upon earning profits from your rental income, you can always exponentially grow your finance with a reinvestment. It suffices to say that tangible asset like real estate is full of worth and a source of passive income.
Hedge against inflation
If you have had to lament the incessant rise of products, then, that’s inflation taking its toll on you. The rising rate of inflation is such a concern and becoming much to deal with. According to a statistical report released by Statistica, the inflation rate worldwide amounted to approximately 3.5 percent, in 2021, compared to the previous year.
However, there’s a way out from this volatile economic event. The value of tangible assets like real estate properties cannot easily be eroded unlike stocks and bonds whole value on a piece of paper is likely to crash, from inflation.
Investments in stocks or securities are one-dimensional. While you did buy them at a low price, the probability of a high sale is tentative. In addition, the assurance of not getting hit with capital gains tax is shaky.
Conversely, real estate has an intrinsic value that acts as a safeguard from the threat of inflation. Its multi-dimensional nature makes it profitable in all market conditions. The potential for a recurring income for investors allows your investment to keep pace or exceed inflation in terms of appreciation.
Great approach for retirement savings
Repeatedly, the chain for retirement planning has always been that you work, you save, then, you retire. In a sense, this looks perfect, because you can never lose money with a savings accounts, but you do not make the best fit for a retirement either. Also, the purchasing power of your savings is likely to depreciate.
Investing in a rental property is one of the best ways to get ready for retirement. The value increases steadily and it becomes your source of capital for other viable investments, as desired. Your net worth expands too. In the long run, you can live off real estate investment.
Appreciation
The value of the purchased property increases over time. The benefit of investing in real estate lies in the increased price interval from the time a property was purchased to when it is being resold. Then, the extra appreciated value becomes your profit.
On a large scope, the appreciation of your property can rise from inflation, increased job opportunities in your market, and overall development in your town.
Autonomy in decision making
Aside from abiding by regulations from the government, strategies to leverage on for your investment are pretty much your decisions. You remain responsible for decisions on the property to invest in, management and maintenance of the property, and the number of tenants, without any interference.