Real-Estate Investment means Income. Real-Estate Investment is the Ownership or sale of any kind of land or property solely for investment and Profit purpose. This Market is considered to have Low risk and high gain factors. If you’re using real estate to climb up the financial security ladder then, you can climb without a doubt but be cautious. Real estate investment not only gives you access to passive income but also, it adds up to your asset increasing your net worth and credibility for applying for higher loan amounts.</p
Here are some reasons that will convince you why Real-Estate is a good type of Investment:-
Low-Risk Investment:
Generally, real estate is considered a relatively low-risk market for investors. But that doesn’t mean you can be careless. Before buying a house you should be researching about the builder, his past projects and approval by RERA. To invest in real estate you need to be well aware of the current trends of the market and if you see the pricing of your neighborhood going down then you should sell the property immediately to avoid loss.
Another great thing in this business is safety provided by the insurance company. In any other field if you suffer any massive loss, then there is around 60% chance of not coming back but in case of property, you can rent it to the tenant.
If you plan to invest in a start-up there are chances that the business may go down and you may have to work hard to get your money back but in real-estate you can hire an agency for your work, i.e. collection of rent, Maintenance Repairs which will just give you more time to invest and earn more.
Inversely Proportional to effects of Inflation:
The Effect of Real estate is inversely proportional to the effect of inflation. By Default, it provides security from Inflation. For e.g., if the inflation rate is 10% for the country, the worth of your property will increase by 10%. If you’re able to structure your leases to index rate of inflation, you may increase the cash flow at the rate of inflation.
High Returns:
Real-estate is the only Industry that offers such high gains on an Investment. If you sell your property after a year, on the basis of average return the selling price of your Residential property will be 10.6% more than the cost price and similarly, with commercial real estate it will be 9.6%. (In Real-estate market these gains are considered to be minimum).
Multiple Channels of Income:
For an investor, real estate investing opens the opportunity of multiple channel income. For e.g., if you have a residential property you can rent it to tenants or if you don’t want full-time occupancy you can list it on Airbnb for side income. Similarly, if you own a commercial property you can rent it to different shops or rent a complete building to one company or rent it floor wise. It completely works according to your will!
Loans become easily accessible at lesser rates:
If you’re applying for a loan for real estate investment it is granted very easily and also at a better rate of interest than any kind of personal loan.
Add up to the asset:
Real-estate adds up to the list of your assets that help you to get a loan easily. It is one of the best forms of financial security. you can use it as a mortgaging item for fulfilling your higher business or personal goals. For a rental property, you would be paying 2-3 % interest more as compared to owned property. For e.g., if you’re paying 4% for the self-owned property then you will be paying 5-7% for rented property.
If you’re planning to start investing in real estate you should read a lot of relatable books and blogs, try to get information about the market that you wish to invest in. Nowadays, paying guests is a way to reduce your expense which reduces the amount they have to pay and they also get to own the property in 25-30% of the total cost involved.