WHY SHOULD I INVEST IN REAL ESTATE?

According to the U.S. President, Franklin D. Roosevelt, “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world”.

We are in the era where people are more privy to information through the internet, and while real estate investment was not so popular back in the day, it has become a means by which quite a number of people have seen to be lucrative enough to grow their wealth.

Real Estate investment is one of the ways to earn higher than average returns, but not only that, it has been deduced by some, that it is the highest earning asset class a portfolio can have.

Investing in real estate can be a lucrative and stable way to grow your wealth and capital in some cases. It is a physical asset with predictable cash flow, excellent returns, good tax advantages, and control and security. With its potential to appreciate overtime (its increase in value), it can lead to capital gains.

Here are some reasons why you should invest in Real Estate, and why it is worth it: 1. Land Appreciates: Land appreciation is a term usually associated with real estate, but in lay-man terms, it simply means the increase in the value of a land. There are some key factors that influence the appreciation of a landed property, factors such as location, economic growth, and infrastructure development. Keep in mind that a land with little value now, can be highly valued in two to five years, depending on the economic growth affecting the location.

2.Passive Income: One of the ways that real estate is beneficial, is in the aspect of earning passive income, and one way that can happen is to invest in rental properties. Rental properties have the potential to generate a steady stream of passive income. A rental property that is well managed can earn regular income, and benefit from long-term leases.

3.Tangibility: Real estate is a tangible asset, in clearer sense, a physical asset. It helps to provide a sense of security and control. How, you may ask. You can physically inspect and maintain your property; you can make improvements (added fixtures, designs, and modernity) to increase its value; you can also use the property for personal or business purposes.

4.Tax Benefits: Real estate investments offer various tax benefits, including: mortgage interest deductions, property tax deductions (deduction of property taxes from your taxable income), depreciation (the value of your property over time can be depreciated, reducing your taxable income).

5.Leverage: When it comes to real estate and you have a mortgage, you can leverage a relatively small amount of your own capital to control a larger asset. What this does for you is that, it can increase potential returns (by using leverage, you can potentially increase your returns on investment), and then, it can reduce upfront costs (what this means is that you will need less of your own capital to invest in a property).

6.Diversification: Diversification simply means to spread your investments across different asset classes and locations. With the addition of real estate to your investment portfolio, it can help diversify your assets and reduce risk. The reason for this is because real estate performance is often uncorrelated with other asset classes, such as stocks or bonds. Another reason would be that a diversified portfolio can reduce overall risk, and increase potential returns.

7.It Builds a Hedge against Inflation: Every economy goes through inflation from time to time. How Real estate works is that its values and rental income tend to increase with inflation, making it a potentially effective hedge. You may be wondering how so. Well, this is because property values and rental income tend to rise with inflation, and real estate investments can provide a relatively stable source of income and value with inflation.

8.Wealth through Legacy: One of the ways to build a lasting legacy, is through owning properties that can be passed down from one generation to another. Real estate investments can be passed down to future generations, providing a lasting legacy. This move can create a long-term family legacy, it can provide a source of wealth and income for future generations, and it can offer a sense of pride and accomplishment for those that inherit it.

9.Control and Flexibility: Real Estate investment empowers you, in the sense that as a real estate investor, you have control over your investment. You have the power to make decisions on property management and maintenance, you can choose when to sell or refinance your property, and you can also adjust your investment strategy as needed.

10.Sustainability Benefits: With real estate investments, you can improve sustainability, through environmental benefits, such as building energy-efficient properties, using sustainable building materials and practices, and having green spaces and urban gardens.

With these new information and knowledge that you have gained, we believe you see legitimate reasons to invest in real estate, because the benefits will always outlive us. When in doubt, invest in real estate and reap tremendously.