Investing in real estate is a great option, one can generate a passive income which easily makes it a great long term investment option. Another reason why we believe investing in real estate is a great option is that investment in real estate can build a diversified investment portfolio. Real estate investment has few advantages over other forms of investment such as potentially higher returns depending on demographics, stability, and diversification. Apart from that, you get to use rental income – which you use to pay off your initial investment and generate great monthly cash flow. Sounds great?
If you are wondering about investing in real estate here is our pick of Top 10 reasons to invest in real estate.
1.Generate a great passive income
A passive income source is through which one doesn’t have to make a lot of effort to start a great monthly cash flow. Undoubtedly real estate investment is one of the best ways to generate a great passive income. In general, passive income is great as it can boost your retirement savings and help you retire early, or simply help you reach your wealth-building goals and diversify your investment portfolio.
Initially, it may take some effort and time to show you the results but if you have researched properly about (what to buy, where to buy, how much to spend, and everything about your tenants and demographics), it can surely generate a great source of passive income for you without taking care of the hassles of daily work.
2. Make market cycle your best friend
Any sort of investment whether it’s stocks or real estate hugely depends on the market cycle. Market Cycle is the effective market timing (buy less/ sell high) which is a crucial component in any sort of investment. While understanding Real estate market timing is not exactly rocket science but there are few factors such as – supply and demand, interest rates, demographics, employment rates, and population growth all of these can have significant effects.
Developing a solid understanding of market trends before investing is mandatory. If these factors are kept in mind one can easily reap the benefits of investing in real estate and can translate into strong future returns.
3. Diversification means stability
If you have ever spoken to a good investment advisor, then you must know the importance of investing your funds into different sources which lead to diversification. A good investor never relies upon a single source of income, and this will ensure that at least a portion of your investment portfolio is performing well at times reducing the risk. Adding real estate investment into your portfolio will help you reduce the volatility of other high-risk sources, hence reducing the overall risk of your investment portfolio, and providing you steady returns.
Therefore, the addition of real estate in your portfolio is not only a great investment it’s also a less risky investment that will diversify your portfolio making it more stable.
4. Increase your Cash Flow
Real estate provides the highest returns, the greatest values, and at the least risk. The fundamental benefit that one can reap after real estate investment is the increased cash flow. The funds generated from your invested property most of the time will be sufficient to supplement your mortgage payment, taxes, other fees, and expenses while generating a sufficient monthly cash flow.
The cash flow will eventually increase over time as you pay your mortgage and the funds can then be used to supplement your retirement funds or even significantly boost your wealth.
5. Better returns than stocks
We have often heard people say that “landlords become rich in their sleep”. While investing in real estate, your risk is minimized by the length of time one holds the property. When the market will improve, so does the value of your property. On the other hand, the risk never changes while investing in stocks and there are always other factors that are not in your control that can negatively affect your investment.
Investing in real estate gives you more control over your property because your property is a tangible asset that can be leveraged to capitalize on a number of revenue streams while generating a solid income.
6. Tax benefits
The real estate investment is borne out of years of savings, one can have emotional attachments as well with the property. Sometimes, other factors like individuals may buy and sell property in upcoming projects to fulfill other factors like family needs or need to move to another location. Because real estate is a heavy form of investment and requires a huge amount of money taxpayers can save taxes by availing the benefit of tax exemptions allowed under Indian tax laws. This law allows an individual to invest in real estate and avail the benefit of exemptions on taxable gains realised on the sale of assets or real estate.
7. It’s a controlled asset
A wise young man of today’s world invests in real estate. Unlike other investment options like stocks that are not controlled by the owner, real estate remains a solid investment option, one can fully control the property. Apart from this the individual also reaps several other advantages long-term returns, retirement benefits, rent benefits, also the real estate properties can be passed to the next generation which makes it an investment that will grow with time.
8. Wealth Creation
If strategically planned, researched and executed real estate investments can be a powerful source for wealth creation. The value of your property increases over time, and corresponding mortgage finance reduces over time. Therefore, it makes a real estate investment, a solid investment for your long term sustainable wealth creation goals as well.
9. Inflation Hedge
Inflation is a term which means a decrease in your buying power. An inflation hedge – in investment – protects you from it. Inflation hedge basically is investing in a property that is expected to maintain or increase its value over time. This is the reason why real estate investment is considered to be a hedge against inflation because the property typically increases its value over time. Therefore it makes real estate investment a solid weapon for you against inflation.
GOHO as a platform to invest in real estate???
Investment in real estate can be understood as a simple tool to expand and become big. Like one uses a lever to make work easy, similarly even if a person borrows to invest in a property it is leverage to expand your assets and help you to grow.
Therefore, real estate remains a solid weapon for you no matter what your goals are from increased income and stability to wealth generation, reaping tax benefits and saving up for the retirement funds. It remains a great investment to save you up against inflation. These were our pick for Top 10 reasons to invest in real estate.
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