Real estate investment is a very attractive way to preserve the value of your money and increase your pension and other income. It is the safest investment in the world if managed and invested correctly. Here are some reasons you should just go for it if you’re considering investing in real estate!
1) Real Estate Yields More Than Savings Accounts
First, if you invest in real estate and rent it out, you can earn additional income. Therefore, the yield will be higher than if you keep it in a savings account. In addition, the interest on savings accounts will continue to fall below the inflation rate. As a result, the value of your money will decrease. In other words, saving money makes you poorer.
On the other hand, investing in real estate is good protection against inflation. The value of real estate is increasing every year. Property prices evolve as prices rise. If inflation increases, it will have a positive impact on your property. Rental income will increase because rents will rise.
2) Real Estate Investment Is Easier Than Buying Stocks
In principle, anyone can invest in real estate. No special investment knowledge is required. On the other hand, investing in stocks requires some knowledge of the stock market. Therefore, it is effortless to invest funds in real estate. Investing in real estate has a tangible, physical value. Instead of owning virtual equity, you own and rent physical real estate. In other words, you know what you own. This gives you greater security and a sense of control over your investment. Besides, real estate investments are very low risk. The rental income from a property is stable. You are not dependent on unpredictable markets or stocks.
3) You Can Borrow Funds for Real Estate Investments
You do not have to put the total amount of your investment property in your account. You can ask your bank for a mortgage for this purpose. If you buy equity, you cannot apply for a loan.
Thanks to cheap mortgages and low-interest rates, borrowing money requires little or no payment to the bank. The out-of-pocket expenses you invest will also pay off. This is due to the leverage effect.
Let us briefly explain what this leverage effect means. Suppose you purchase a certain property. You invest 20% of your own resources in this property. The rest is financed by the bank. Thanks to cheap mortgages and low-interest rates, you pay very little to the bank. As a result, your resource yield increases.
4) Increasing Sale Value
Real estate is a lucrative investment with high returns if you invest in rental properties. Tenants primarily contribute to the payment of the real estate investment. This provides a steady income, allowing you to enjoy additional income while paying your mortgage. Additionally, rents can be indexed annually, allowing them to continue to grow. Finally, the sale value of the property will also increase.
5) Demand for New Flats Is on the Rise
New flats are in high demand. The economy is strong, and the construction industry is booming. As a result, more quality houses and apartments are available for immediate occupancy. Families and households are changing. Smaller families are becoming more common. This means that demand for affordable, quality (rental) housing will increase. Demand in the rental market is high, but supply is too limited. Investors also have the advantage of being able to rent out their investment properties safely and securely.
If you want to invest in real estate, be sure it will be rented out, and seek good returns! Share your thoughts with us in the comments below!