Many of us think that investing in real estate is complex and out-of-reach for the majority of us. However, being successful in the real estate industry doesn’t necessarily call for savvy investing skills or deep pockets.
On the contrary, investing in real estate is quite accessible, and there are a number of reasons to start investing. Below, top five reasons you should start buying investment properties right now.
Real estate appreciates in value
Appreciation is one of the things that make investing in real estate one of the safest investment strategies right now. The value of properties increases with time. The rental property you buy today will cost a lot more when the time comes to sell. The rental prices will also increase significantly 20 or 30 years from now.
Along with the increase in value of the house, the value of the land on which the house is built is also going to go up a few decades down the line. There were also cases where the land’s worth increased even though there was no house on it. And in some instances, the land ended up being worth more than the building. By investing in real estate, not only do you secure a rental income, but you can also turn a profit when you sell your property.
It can help you afford your dream house
Another reason to invest in real estate is the fact that it can help you afford the house you want. We all have an idea of what our ideal home would look like. For some, their dream home is a modern farm house style property that’s simple and practical in design. For others, a perfect house may be something different like a townhouse, a bungalow, or a Victorian house.
Whatever your dream home may look like, purchasing a rental property now can help you get closer to that dream. For starters, look for something more affordable that’s suitable for your current lifestyle, and live there to build some equity. Then, you can start investing in real estate. Over time, you’ll manage to build your portfolio and wealth, and eventually, you’ll be able to purchase your dream house.
Real estate properties are improvable
Image Credit: Shutterstock
Probably the best part of investing in real estate is that you can make improvements that will maximize its value. From tackling kitchen and bathroom remodels to adding luxurious amenities like pools, there are many improvements that boost property value.
Some real estate investors will also choose to purchase bargain homes, make cosmetic repairs, and then sell them for profit. This is called house flipping, and although it can be risky, when done right, such investments can yield rewarding results.
It ensures a steady flow of income
Investing in real estate also means you get to secure a passive income source. Having a steady flow of rental income coming in every month is what makes investing in real estate so attractive. Of course, ensuring a steady flow of cash does take effort. You need to make sure that the tenants you find for your rental are right for you. Working with an experienced property manager can be of great help here.
To ensure that tenancy is set up for success, set rental prices that are appropriate and raise your prices responsibly. Right rental prices combined with the right tenants will reduce the risk of vacancy and ensure a steady cash flow.
Rental property cash flow is predictable
Rental properties fall into the category of tangible assets. As such, they always hold some monetary value, which makes them one of the best investments for ensuring financial security. The same thing can not be said for the majority of investments. Most investments are unpredictable, so you can never be certain when it comes to cash flow and their monetary value.
Real estate, on the other hand, makes it easy for you to predict how much income you can count on. If you make sure that your property is occupied and know your rental prices, you can be certain about your monthly rental property cash flow. If you make a good real estate investment, you can expect a cash flow of 6% or more.
Real estate can be a lucrative path once you get the basics right and start buying the right investment properties. Now that you know the reasons why real estate investments make for some of the best and safest investments, the only thing left to do is begin acquiring real estate knowledge and start reaping the financial benefits of investing in real estate.