When it comes to managing your finances, there is this very beautiful quote that sums the crux of everything. It goes something like this, “If you fail to plan, then you plan to fail”. And this is truth for almost everything that comes in our life.
It is very important to be well advised and well informed in the matters of finance management and the economics of it all. This might seem like something really complex but all of it just needs a different perspective and core understanding. And once you get through it, there is no stopping you from making smart investment choices which will benefit you over the long run.
There are many avenues for investment opportunities like the stock market, government bonds, and mutual funds. But one of the underestimated choices is the real estate market. The real estate market throws open the door to maximizing valuation over time. You can look at Than Merrill’s Linkedin profile and see the career trajectory of someone who has made his living investing in real estate, but here are some of the simple reasons on why real estate could be a good investment for you.
Steady Positive Cash Flow
One of the biggest perks of investing in real estate is its capacity to continuously produce positive cash flows. Once all the legal work and payment is done, real estate makes for a great financial asset and desirable returns.
This kind of continuous and consistent cash flow is quite impossible to see in any other kind of investment option, be it stocks or bonds.
You can place positive leverage on the real estate asset that would allow you to effectively increase cash flow by borrowing money at a lower rate than what the property pays out.
High Physical Asset Value
Real estate is very much tangible and in the true sense has a physical value. The built structures add a lot of value. In the case of real estate, the land, structure and its amenities all have true physical value.
Its tangible nature provides a sense of security to its investors because there is always its tangible component to back it up.
Tax Benefits
This is one of the best parts that support investing in real estate. With real estate comes a whole bunch of strategies for increasing tax deductions. Real estate property often provides the investors with a wide variety of choices to convert personal expenses to valid business deductions.
Based on your classification and income level there is a high chance of a tax write-off for a certain proportion. In fact if you leverage your capital then because of depreciation and mortgage interest deductions, you can generate almost tax-free cash flows.
But before you go about investing, check out the tax benefits through a reputed chartered accountant or a financial lawyer.
I am sure that if you look around there will be a real estate company in Antalya, Mumbai, Dubai or even Tokyo. So, wherever you stay, getting information should not be hard.
Inflation Hedging
This is a very interesting term which explains a lot about the effect of rising prices. It is an excellent reason for why one should invest in real estate.
Now since all the countries in the world run on fiat currency, over the period of time a country currency value decrease or to make it simple the prices around us increase and everything becomes costly. This devaluates your currency and is commonly referred to as inflation. So, this means just saving up the cash in your account is not of any help as it does not increase your wealth in fact over the period of time your purchasing power reduces.
But with real estate the same thing does not happen. Over a period of time land prices increase and it leads to higher valuation being attached to it. This makes you wealthier making real estate an incredible place to invest money in.
Because It Is Easy
Investing in real estate does not take any expert knowledge. You just need to watch out for the basic requirements and the location of the place. If all the things check out, then one can easily invest into real estate by completing the formalities related to purchasing the house.
Unlike mutual bonds and stock markets where you need a lot more understanding of what you are investing in, real estate can be looked up online and is much simpler; thanks to the technology today.
Real estate investments are no longer an enigma these days. They are perfectly understandable and are really helpful in generating additional wealth. All of this makes real estate an excellent option for investing and should be done by everyone based on their budget limitations.
