Real estate investing is a high-yielding asset class that can go a long way in diversifying your investment portfolio. If history is anything to go by, the market continues to show resilience and growth, making it an attractive investment opportunity.
Reasons Why You Should Be Thinking About Real Estate Investment Today
Here are a few reasons you should invest in real estate today.
1. Real Estate is a Safe Investment Option
Unlike fiat currencies, real estate doesn’t lose value during inflationary periods. Instead, it appreciates in value, as the prices of land and building materials go up. This fact alone makes this investment space a safe one, especially in the long-term.
2. There are Multiple Avenues of Investing in Real Estate
Real estate offers you the opportunity to invest in different structures that suit your goals. Whether its retail real estate, apartment units, or whole buildings, you have multiple options to help you meet specific investment goals.
3. Real Estate value Appreciates in several ways
As the inflation in this market space sets in, natural appreciation in value occurs. But you can also have artificial or “forced appreciation” by deliberately adding value to your building. You can do this by replacing worn out floors, walls, and ceiling; improving the interior aesthetics, or enhancing your home entrance by adding landscape features.
By doing so, you can increase the rent value for a rental apartment for instance.
4. Real Estate Investors generally Attract Lower Taxes
The government recognizes that investors are developing land for the public, and so the tax regime is favorable, as compared to other asset classes. Investors enjoy tax breaks such as:
• Management services deductions
• Property tax deductions
• Associated travel costs deductions
• Lower cost of repairs and maintenance
5. You have easy access to loans
Your real estate gives you a reliable security to acquire loans from your preferred lender. And it gets even better for those with a consistent job, reliable credit, or a qualified sponsor. The interest rate on a mortgage is also fairly reasonable compared to conventional loans. What’s more, your bank is also likely to offer you options when choosing your mortgage length.
Is Real Estate Investing Viable or Right for you?
Just like most other investment options, real estate will not pay off immediately. Especially when it comes to rental real estate. If you’re eyeing this space, you should be prepared to incur upkeep and maintenance costs among other demands.
Before you consider investing, take inventory of your financial standing. Set aside an emergency fund to cover six months of upkeep expenses such as insurance, mortgage, and apartment maintenance. When you have a solid financial foundation, you can easily take on new opportunities and additional risks to help you complement your passive real estate income.
Bottom line, if you know where to look, and what to look for, you can win big investing in real estate. Regardless of the economic outlook, even during volatile times, it will continue to be a safe long-term investment option.
Here are some takeaway tips if you plan to venture in this business space.
• Follow the Migration
If you plan to invest in metro areas, consider the population growth, rental growth, job growth, unemployment rates as well as the quality of life. This factors will likely affect the growth rate of your investment.
• Think Industrial
As more consumers flock online markets for convenient shopping, it has continually increased the demand for warehouse spaces. Electronics, groceries, or general appliances are popular shopping products, and industrial real estate is likely to outperform office real estate in sales and rental income currently.
To find lucrative opportunities you can add to your investment portfolio, consider areas with a high population, diversity, and easy access to transport routes such as ports and railways.
• Consider Multiple Multifamily Opportunities
Multifamily friendly real estate continues to be more lucrative than single family units (detached housing units). A spike in population density presents an investment opportunity, as families can live and work comfortably.
You can browse through our blog to learn more about real estate investing and the growth opportunity it holds.