Real estate has been around since the beginning of time but there seems to be a new trend emerging. Is real estate still a profitable investment concept?
There are two types of real estate investments: residential and commercial. Residential properties include single-family homes, townhouses, condos, apartments, etc. Commercial properties include shopping centers, office buildings, warehouses, industrial parks, etc.
In this blog post, I am explaining whether buying real estate is still a viable investment option.
These days, people have access to countless methods and ideas for wealth creation. The Internet, for example, has helped to create several niche industries and markets, and many individuals have become millionaires because of that.
With that in mind, you might be wondering whether there’s still a place for real estate as an investment concept. After all: there are scores of easier ways to make your money grow without the same level of investment or effort required.
The truth is, real estate has always been a superior investment concept, and it very much has a place in today’s digital society. Here are a few reasons why real estate can still be right for you if you’re looking for reliable methods of wealth generation:
Real Estate Is a Tried and Tested Concept
Firstly, it makes sense to keep in mind that real estate is a long-established way of making money grow. The idea is simple: you buy a property, lease it to tenants for a consistent income flow or flip it for profit when the market is in your favor.
Some property investors might end up using the profits from their property rentals to purchase another property, repeating the process until they have a vast portfolio. Property investment is even something you can do with other people for greater buying power.
The Market Is Easy to Gauge
You should also remember that the real estate market is easy to gauge compared to some digital investment ideas. Many online tools can help you determine whether it’s a buying or selling market, so you know when to move at the right time.
For example, you may look at Reunion Resort properties and buy one or more properties when it’s a buyer’s market to keep your costs as low as possible. You can then rent out your properties until it becomes a seller’s market, resulting in substantial profits.
If you try to gauge the financial markets, you’ll find it challenging to determine which way the markets are going. It’s even worse if you try to make consistent profits with relatively new investment vehicles like cryptocurrency.
Bricks and mortar is easier to follow and predict, and you don’t need to spend 24 hours a day pouring over charts and using “technical analysis” tools to decide when to buy or sell your investments.
You Can Take Actionable Steps to Increase Your ROI
When you invest in the financial markets, such as forex or cryptocurrency, you can’t directly influence price action unless you resort to illegal ideas. An advantage real estate has over such investments is you can take actionable steps to boost your profit – and it’s all legitimate.
For example, the most common method of increasing your real estate ROI is by carrying out some renovation work at your property before you put it up for sale. Even simple changes like having a new kitchen or bathroom suite fitted can increase your profit substantially.
Another idea might be to extend the property to increase the potential occupancy and the price you can get for it. Those are just two of many steps you can take to boost your property investment earnings and profit.
Real Estate Is a Good Retirement Strategy
It should come as no surprise that one of the best ways to boost your retirement income is by investing in real estate. However, many ways can work for people, depending on their investment strategies.
One way is by taking out a mortgage on a house and living in it. Eventually, the mortgage will get paid off – hopefully before you reach retirement age. Then, when you finally retire, you can either sell the property or rent it out while moving to a different home elsewhere.
Another real estate retirement strategy is to form an investment partnership with one or more people, such as family members or trusted friends. When you pool your capital together, you can invest in more affluent properties or expand into commercial or industrial properties.
Generally speaking, the earlier in your life that you invest in property, the higher your ROI, depending on the investment strategies you follow. However, keep in mind that investing in real estate doesn’t mean buying tens or hundreds of properties.
You Can Invest in Property Anywhere
Another advantage of property investment compared with other investment concepts is you can choose to invest anywhere in the world. You might live in the United States, for example, but that doesn’t stop you from buying property abroad.
Many wise investors often purchase property overseas where property prices can be lower in some nations, yet there’s a high demand for rental homes. You don’t even need to move abroad to manage your investments.
You could have a property management company handle the day-to-day maintenance and rental processes on your behalf – even if you’re thousands of miles away from your properties.
Alternatively, if you have family members living in other countries, you could have them handle those processes for you and save on your investment costs.
Real Estate Is Tax-Efficient
Did you know that some investment concepts might seem like great ideas at first, but when you get taxed on your profits or proceeds from sales, you might end up with very high tax bills?
That’s why it makes sense to stick with tax-efficient investment ideas like real estate. For instance, if you sell your investment property after 12 months, the capital gains tax you pay is typically 15% to 20% lower than your personal tax bracket?
It’s also worth keeping in mind that real estate is tax-deductible. Therefore, the tax rules allow you to offset maintenance costs, property improvements, and even mortgage interest against your profit, resulting in a lower tax liability.
There are undoubtedly many ways to make your money grow in the 21st century. Sometimes, it’s better to stick with the tried-and-tested methods like real estate instead of chasing high profits in hazardous investment concepts such as cryptocurrency.