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Why invest in real estate?

PMI Accelerate - Tuesday, April 6, 2021

1. A stable amount of cash comes your way

Investments with inconsistent profit sums can be a problem. Whether it is mutual funds, shares, or any other alternative, the earnings never stay constant. In real estate, this is not the case.

  • Consider that you have rented out an apartment. The tenant would be paying you a constant sum at the end of each month. In other words, your earning would not depend on market conditions, economical fluctuations, or similar factors. This makes real estate a more preferred investment option.

2. The value of property always increases

It is important to select investment options that do not have depreciation issues. The value of property never decreases which makes it a safe bet for people putting in their money. If you have purchased a house for a particular value now, its monetary value will be more after a year. 

  • A lot of people rent their property for a certain span and then sell it to get a fat profit. For instance, if you have an apartment, renting it out for a year means getting a fixed sum for 12 months. After that, when you sell, the price would be more than the original cost. 

3. Real Estate does not necessarily require a full one-time payment

It is important to consider affordability before you decide to buy something. If you are interested in an apartment costing a million dollars, paying it all together may be quite difficult. This is where you can make an initial down payment and pay the remaining sum in installments over a pre-planned span.

  • In the case of property, you can select options that are beyond affordability. The reason being that the entire sum does not have to be paid together. In terms of investments, this is quite beneficial. 
  • Quite a few investors get a property mortgaged and then rent it out. They pay the installments from the rental payments and save the remaining sum or use it for other purposes.

4. Property value increases with improvements

You can always purchase a property in substandard condition and then renovate it for a better appearance.  For instance, if the basement has the paint coming off, get a fresh coat applied. This will make the walls look more presentable. 

  • Countless other improvements can be made without spending a fortune. Apart from paint jobs, you can get the flooring done again. This would not cost a lot of money but in terms of selling, it would be easy to get a much larger price than the actual cost. Real Estate is the only niche where you can make improvements and enhance asset value.  Other investment areas do not offer an option to improve monetary value.

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