Is Real Estate A Good or Bad Investment?

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Usually investors have portfolios filled with stock and bonds, but Real estate is also a great investmenttool, that can help them diversify with property, which can help a lot with the overall return of the portfolio.

Real estate investment is generally considered a safe investment. However recent property price collapses in US and some parts of Europe have shown that it can also be a volatile asset class. To secure an attractive return on investment, an individual must invest in a property that registers a steady growth rate over time and ensure the entry and exit points are well timed in the larger macro-economic cycles.

The risk is at a minimal rate and the return is high in comparison to risk when this is achieved, so when adding real estate to a portfolio, the equation is increased returns versus sometimes decreased risk which is relatively attractive in comparison to other asset classes.

Real estate income increases with inflation, whenever there is a new tenant generally the rent goes up because generally rents are high because of the inflation. In some agreements the rents are raised periodically and so even if the tenant is one and the same the return increases.

The one main benefit of investing in the residential properties is that a person can get good mortgage rates and it makes sure that the money of a person will not be stuck in 1 investment. An individual can begin investing in Real estate property with a small amount of money. The return on the investment is decided by the rate on which a person has purchased it; the outcome is not affected by the condition of the market. For getting maximum profit, purchasing a real estate at the right time and in good price is very important. A person should keep check on the sales in order to purchase a property in less. Investment in real estate is good but it can be changed into bad investment if a person waits too long for the prices to reach to its peak. Selling out a property, when a person is getting a good profit is a great idea.

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Investing in Real estate is and it will always be one of excellent sources of passive income. Real estate investment gives 4 financial advantages to the person, who wisely invested:

 

  • It is one of the best and the easiest ways to get cash flow.
  • Many individuals invest in real estate is for getting the tax advantages, government grant these.
  • Leverage gives an investor the ability to own a real estate by paying a small amount of money. It makes a person able to lessen his/her out of pocket costs and get large amounts of real estate.
  • One other thing which gives profit by investing in real estate is appreciation. It is the rise in value of the purchased property with the passage of time.

 

An investor makes money when he/she invest in a real estate and purchase it, an investor makes money when he/she own it and an investor makes money when he/she sell the property so, investing in real estate means PROFIT!