As we approach a decade since the global economic recession of 2008, many people are quick to identify the source of the violent decline as the housing bubble burst and the collapse of subprime mortgages. As a result, many people are weary and hesitant to invest in real estate. There are valid concerns raised—what if there’s no positive cash income? What if the property never appreciates? What if you accept poor tenant after poor tenant? Taking the time to educate yourself on real estate property investment can prove that now, more than ever, is the best time to invest in real estate. Here are some reasons as to why.
Tangible Stock that Keeps You in Control
As the investor and owner of real estate, you have a physical piece of property that puts you in control. You have free reign over what to do with your investment. You can sell it to reinvest in another piece of real estate, remodel it, work the land to make more profit, the list goes on. Of course, these are all things you couldn’t do with a stock, where you can’t see your investment and you’re at the will of business owners and other shareholders. It’s better to invest in something that provides you with opportunities to increase your revenue return.
Appreciation is the increase in the value of an asset over time. While appreciation can happen for a number of reasons, in real estate the main reason for appreciation is a result of inflation or interest rates. Over time, as the value of your property increases, it can also increase the opportunity for you to sell your real estate and reinvest in another property of higher value. Appreciation is one of the main reasons, and historically and statistically accurate reasons, to invest in real estate now more than ever.
Long-Term Financial Stability
Whether you’re interested in adding to your retirement fund, creating a financially secure future for your family, or just looking to have some extra cash on the side, investing in property is long-term commitment that forces you to keep your property in a good and desirable position. Of course, this is only successful if you rent to clean, respectful, and pleasant tenants. Tenant screening services by SmartMove can alleviate some of the stress of fielding potential applicants and in the long-term, will help stabilize your financial stability. Additionally, the longer you keep the investment, the more value your property will gain, which only increases your income.
Everyone is looking for some way to earn extra money. By investing in real estate, you can be assured you will reap an extra monthly income that can help with any long-term financial goals you may have. For example, if you invest in a piece of property, you can work the land to further line your pockets. Or say you want to rent out that land to someone else, or build more homes to rent out. All of these examples go beyond just investing in real estate. Since you own the property, it’ll be much less expensive for you to do all of the above, too. If you’re looking for more of a hands-off investment, you can also benefit from cash flow without giving up your time. Hire a property manager like Good Life Management to take care of the daily ins and outs, and still reap the rewards of a profitable rental.
Property Upgrades to Increase Value
You’re sure to see a positive monthly income by investing in real estate. However, those who are serious about increasing their equity intentionally purchase property at a value cost – only after they’ve figured out how much the value of improvements they are planning to make will exceed the initial cost. This meticulously thought out plan immediately boosts the investor’s equity, which can up the value of your property. Tenants who notice a high-value property will be willing to pay more monthly if they can appreciate the value of improvements done to the property. In turn, you’ll have more stability by investing in something that supplies a larger income return than something that relies on capital value return.
There isn’t a better time to take advantage of the low mortgage interest rates and invest in real estate. You’ll feel satisfied knowing you’re investing in something that provides an extra income for your long-term financial future and stability.