I'm sure you all have heard by now, it is in the real estate where your investment is the safest. Many can attest to that statement; there are countless stories depicting success driven by real estate investing. So, what are the reasons that make investing in this industry extremely profitable? Within this article, we will discuss three critical features that make real estate investment a great idea to pursue and how it can be beneficial for you.
1. Real Estate Investments Are Immune to Inflation
Reading the above statement alone can already be enough reason for someone to go and invest in real estate. In other words, spending your hard-earned money in real estate ownership can ultimately protect you from the harsh aftereffects of inflation, unlike other conventional investments.
The reason for this is that the real estate industry tends to rise positively in correlation with inflationary pressures. Meaning, property values, and rental rates go up when inflation increases. This makes as if inflation is on your positive side.
2. You Can Refurbish Or Enhance The Value Of Your Real Estate
After buying a stock, you get to hold that for a set period and hopefully you can sell it off for a high profit. The success of your stock relies on company management and their corporate success, which is definitely out of your control.
Unlike the example above, the stocks, whose rate of returns depend solely on third party factors, real estate investments are directly under your direct control. A unique advantage of investing in this industry is that you may increase the value of your real estate by your means. Examples include aspects relating to adding repairs in the property, improvement to the overall property, and the tenants you allow to live in it.
3. Real Estate Investing Allows Use of Other People's Money
Sounds unbelievable but you can invest in real estate even if you do not have enough money. You need to know-how. This is made possible because real estate is a physical property, in other terms, a hard asset. That is an attribute that makes it extra attractive to financiers who are willing to invest in it.
This is why you can see a lot of real estate products that are bought with debt. So real estate investment can be made using cash or mortgage financing. In the latter case, payments can be so arranged to allow payment of low initial sums, provided by you or a willing third party.