Why you should invest in real estate this is a basic question but the question is very big and important, you have saved cash and looking the ways to invest in depending on your risk appetite. You have many options to invest that could be stock market, mutual funds, provident fund, gold, commodities and saving schemes.
Every investment options have some pros and cons, I am not opposed to something every person’s personality and behavior are different. Some people are making money from the stock market some are from gold and mutual funds but herein we should focus on real estate.
Why you should invest in real estate
Real estate no doubt is a great investment of your life for many reasons. You get a huge return on investment in the long run sometimes in the short term also. And a great way to build a secure wealth for your future.
Where you get just a nominal return on your savings, and if you have parked your capital in stock that could be risky if your horizon is not long. On the other hand,, real estate investment is a safe investment and you get appreciation as well.
Real Estate Provides Better Return Than Any Other Investment Option
In real estate your risk of loss minimized by the length of time, in the long run when the market gets appreciation your property also does. Here you will say that the stock market also gives better return but in stock, there is the massive risk behind your investment, in stock, your investment could be zero if a company closes or something wrong happened with that.
But in real estate you are the sole owner of your property, it gives you more control because it is in your hand and you can generate many revenue streams with your property.
It Offers Passive Income
Property investment generates passive income for life, you can enjoy life and time freedom with passive income. I know some people think it’s not easy to task to hold a property because you think it’s a daunting task, if we see technically this is not for everybody, only some people enjoy and create that type of wealth and life.
It needs huge cash upfront to get the reward, everybody doesn’t have that much cash to invest, then if you have time constraint there is a solution in the market hire a consultant to simplify the process for you.
Investment in property provides you the lifestyle most people dream of in life. And with the appreciation, you enjoy passive income at the same time.
Diversification Leads to Increased Stability
Investors find ways to diversify their investment portfolio, they want to manage their risk, and allocate their funds so that they can minimize the risk and maximize the return.
The allocation of funds brigs you the return even in harder times of tough market condition, and saves your capital in a fluctuating market.
Second, where it saves you high-risk management and providing you a steadier return.
A long term approach not only gives you passive income but also a great way to beat in an effective manger against inflation. It generates income more than your inflation or anything it could seem slow in the current but in the long run, it definitely beats the market condition and any type of market slowdown. It covers everything the funda is you should stay invested in those assets.
It helps you to maintain the standard of living.
Long Term Leverage Facility
Property is the only investment in your portfolio that offers by the bank the leverage concept, why they offer leverage, what is the concept behind it. Because the finance companies believe that only property is the only asset that can bring return if a person holds any other option like stock.
The stockbrokers offer leverage but that is for the same day or one month and there is high risk and the probability of return is minimal. On the other hand, by giving a small portion of the total value you can hold property.
But here people think that why should pay so much interest, I want to make it clear here that after paying a lot of interest you still will be in profit that’s the magic of leveraging.
It is the best vehicle to create wealth if we select strategically, the value of your property increases. This is the biggest wealth creation model in the world, the property business has created more millionaires than any other business, there could be a time period when we see some depreciation in property value but that is temporary.
This is the longest vehicle than other businesses’ time periods is less just 10-15 years then they disappear but property after a short slowdown it again accelerates its speed.
The Bottom Line
Real estate is the simplest thing to understand and the ability to minimize your portfolio risk and maximize your return. To make secure and steady income and appreciation of your wealth real estate investment is the best option out there.
People who have extra cash this is the best time to invest in India or anywhere in the world because the Indian Real Estate market is now In slowdown mode, in the coming years it will pick its pace.