So why should you invest in real estate? For one, real estate is a stable investment that doesn’t lose its value over time. What’s more, here are the top 5 reasons why investing in properties is a good idea.
1. Leverage
Property investing will enable you to secure leverage, a mortgage or a loan to make the most of your own investment. When compared to a non-leveraged investment, your potential return is markedly increased with a leveraged property investment.
2. Income
The return you get from investing in property is divided into cash flow and capital appreciation. Cash flow refers to the profit you earn from rent monthly and appreciation in capital is the value increase of your property. If you are improving your property’s value over time and investing wisely, you will also get a positive monthly income, which is a more stable source of income compared to other investment types, even if you take void periods into account.
3. Instant gain on your property investment
If you buy your property at below market value, generally, you can add equity to your investment instantly just by purchasing cheap. To achieve this, investors should be diligent and do extensive research to find the best deals.
4. Increasing your investment’s value
Unlike other types of investment, you can significantly increase your investment’s value by investing money into your property. If you spend prudently, you can add substantially more than your spending.
5. Inflation
Property investment is a means of hedging against inflation. If the inflation is high, the value of your property as well as your rental income will increase at a considerable rate. Your cash flow will also go up when there’s an increase in the cost of living.