Real estate investing has always been one of the most popular investment methods. If you look around yourself, you will find that most of the billionaires in the world have earned their profits through real estate investment. In addition to attractive returns on investment, real estate investing also creates physical assets that can be felt and enjoyed by their owners. Also, besides government bonds, real estate is the only field where investment is considered highly stable and safe. It is no wonder then that real estate investing is attracting large numbers of people who know they can earn income that is inflation proof and better than any bank or government scheme.
Stock market, investment in gold and commodities, and foreign currencies are the alternatives to real estate investing. However, all of us know how volatile markets can be and how people have lost money in a matter of days and hours when their calculations go wrong. This is never a problem with real estate investing as value of properties cannot depreciate overnight or in a short period of time to disallow time to exit from a real estate deal. In fact, on most cases, prices of properties tend to appreciate with passage of time, thereby ensuring a passive income and attractive return on investment.
Investments in stock market are vulnerable to market forces and changes in economy and even international order. This means an investor can never relax and breathe easy and always needs to have a close eye on his portfolio. On the other hand, people enjoy their real estate investments for years and even decades without having to think twice about them.
There are many other benefits of real estate investing. There is no other method of investment where the investor can make use of other people’s money to create an asset. You can hope to become the owner of a property by putting up just 15-20% of the value while a lender finances the rest of the amount and which you repay in equal monthly installments. You can never hope to borrow money to invest in stock market or any other investment method.
Another big benefit of real estate investment, and which attracts many to this field is the prospect of passive income in the form of rental income from a property. You can not only buy a property by paying only a small fraction of its market value but also hope to pay your monthly obligations with the rental income you earn from your tenants. This is not all as you can also hope to earn a decent profit from your investment in rental income property by looking after the affairs of your property and tenants.
The beauty of real estate investing lies in its ability to produce regular passive income for the investor in two different ways. On the one hand he earns rental income from tenants and on the other hand he enjoys appreciation in the price of the property over a period.
Finally, the investor putting his money in real estate gets to enjoy attractive tax benefits provided by the government. These tax benefits help in saving a lot of money otherwise paid in the form of income tax.
Low barrier to entry, both financial as well as any knowledge of real estate industry attracts large number of individuals to this method of investment. You can hope to benefit financially by using different methods of real estate investing such as fix and flip, buy and hold, and investment in rental income properties. You can choose the method that looks easier to you depending upon your skills and knowledge.