Why Real Estate?

According to research, real estate has been rated as the top long-term investment with gold, stocks, savings accounts, bonds, and mutual funds following. It’s the same all around the world - the emotional satisfaction of owning property is strong. Experts believe that the demand for it will only increase, even suggesting that if done correctly, real estate is the highest-earning asset one can have.

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Here are some of the most prominent reasons you should invest in real estate. 

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Good Returns, Less Volatile

Aren’t these the four words every investor wants to hear? Almost every asset with good returns is increasingly volatile or risky (e.g. the stock market), but when an asset isn’t volatile or risky, it doesn’t provide great returns (mutual funds). So is there a middle ground? Absolutely! Historically, the risk in real estate reduces as you hold on to you property. When the market starts to improve, so does the value of your asset because of the equity you build. In the case of the stock market, the risk never changes and several factors are beyond your control. Thus real estate provides more control and a tangible asset you can capitalize on with several revenue streams. 

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It’s a Safe Investment

That alone is a good enough reason for you to invest in real estate. In a world where nothing is certain, investing in a safe asset can be a blessing. When investing in real estate, your asset is secured by itself – the property you own. You’re going to see your investment lose value in rare cases, and even if it does, it will only be for a short period. Unlike fiat currencies, e.g. USD or CAD, your asset won’t lose value because of inflation every year. It will outperform against those treacherous waves of inflation. A smart investor may also set themselves in markets that perform well by short-selling as did several investors during the 2008 global crisis. Short-selling: Betting against the market. When the market goes down, you earn money.

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There Are More Than One Way Real Estate Prices Can Appreciate

With real estate, there are several ways your assess can appreciate. The one most discussed is through the value of the market. However, appreciation can also be forced. Think of it this way: natural appreciation generally occurs as market values improve. On the other hand, forced appreciation is the equity you can earn by putting in money. Installing new windows? They’ll increase the value. Installed a new roof or renovated the garage? That will increase the selling price, too. This happens because as soon as you renovate a house or apartment, you’re able to charge a higher rent which, in turn, increases the value of your asset. 

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It Gives You a Chance to Diversify Your Portfolio

If you’ve ever spoken to a financial advisor, then you’re probably aware of the importance of diversification. When you have a diversified portfolio, you spread the risk of your investments onto different asset classes. Real estate, in this case, will act as the tangible asset you use to mitigate the risk from your portfolio. Fortunes can be amassed by investing only in real estate. 

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You Can Pass It Down to Generations

Not only are you transferring a tangible asset to the next of kin, but the transfer is easy to make. Several people with developed real estate assets pass them down to their children or other beneficiaries, which can also help to defer some of the tax implications. 

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Investing in real estate is not only a safe option but it is also can be one of the easiest asset classes to manage. It will yield some of the highest returns for any portfolio year after year. Do this right, and you may end up retiring sooner rather than later.