Investing in property is a good bet. The value of assets is more likely to grow in the long run. The short- and medium-term, on the other hand, can offer a great monthly income. Among bonds, shares, and cash, property investment is also popular. Some business-minded people would argue that real estate investing is not easy and simple. It takes time to develop the expertise to understand the market. It requires patience and effort before finding the best option. Despite that, all of your sleepless nights will be worth it.
Why Invest in Property?
Imagine you have $30,000 deposit. The bank is very unlikely to approve a $70,000 loan application for investment in shares. This is because of the possibility that you can’t pay them back.
What if you request the same amount of money to purchase a property? Banks will surely give you a fast and convenient process.
Investing in property means you have a safe leverage. Simply, you can have a higher Return on Investment (ROI). Imagine you have $20,000 to invest in shares and property. As the market goes up by 10%, your share portfolio will be $22,000.
Now, let’s use a hundred dollars buy a real estate property. Once the market goes up by 10%, it will be $110,000. Thus, you’ve gained $10,000. However, this can work in the opposite direction. This will only happen if you invest poorly. Fortunately, the leverage can give you more opportunities to get better returns on your investment.
- Long-Term Stability
Another advantage of investing in property is stability. People consider real estate investment because it’s more stable and risk-free than investing in shares. This is the main reason why banking institutions are willing to lend you money for property investment.
Banked cash and shares are more liquid, meaning you can get cash more quickly than you‘ve ever imagined. Nevertheless, investing in property is a different case because it’s not as liquid as banked cash and shares. Plus, getting your money is slower than expected. The only difference is that the market does not fluctuate easily. It tends to depreciate in the future. The good thing is that it’s more stable and better than the stock market.
- Positive Cash Flow
Investment property generates positive cash flow. This is helpful because there’s someone else that will pay off your mortgage and other related expenses. Not only that, you can save money in your bank account.
Despite that, people invest their money in a negatively geared real estate. Still, they hope for capital gains. It’s always better to invest in positively feared property to generate cash flow.
- Control over Expenses
Aside from a high ROI, you will be in control of your expenses. These include maintenance, council rates, and management fees. So, why would you waste money on things that don’t give you enough control? Investing in property is a bright idea.
- Constant Improvements
Last but not the least is property improvements. This means there will be an increase in the value of your real estate as time goes on. Well, buying shares and making them valuable is hard as nails. Doing it is risky and impossible.
With a property, you can increase its value and boost the price. Just don’t forget to provide TLC. While it can be hard, it’s still worth it!