Real estate is a profitable and low maintenance investment that anyone can do, depending on how you will use the property, learning marketing strategies is not needed, making it easier to enter this business. Read further to know more about the benefits real estate investment brings.
Benefits of investing in real estate
- Higher returns and less risk. Investing in the stock market requires lower funds to start, compared to real estate. However, the capital used for property investment yields higher profit with minor risk. The need to monitor assets to decide on the best time to buy and sell is eliminated.
- Non-perishable. Real estate does not have an expiration date. Instead, it becomes valuable as time passes by. Holding the property delivers greater profit, because as the area around the lot becomes developed, the price of the property also increases.
- Flexibility of use. While waiting for a rise in your land’s value in the market, there are numerous ways you can convert the land into use both for personal or commercial use. Here are some ideas that you can use for your land: (i) personal home – cutting off rent expenses will give you extra cash for saving or splurging; (ii) studio – can be rented out or used as a personal office; (iii) commercial area – source people who want to start a business in the area and negotiate with them to rent your place as their physical store; and (iv) apartment – an ideal source of income due to its low maintenance aside from the occasional repairs.
- Tax benefits. Real estate holders get deductions on tax, insurance, operating cost of expenses and other items. For home-based entrepreneurs, you can convert the area into your own home and office. This way you deduct rent expenses and get tax deduction claiming that half of the property is for business purposes; this can include gas, electricity, repairs and other necessities.
Drawbacks of real estate investment
- A large sum of capital. Real estate is sold with a big price tag, making it somewhat more difficult to start investing than with some other business ventures, due to the financial requirements when purchasing a lot or land to be developed.
- A lot of paperwork. Aside from the money needed for buying the property, you should also have extra cash to process the legal documents for transferring deeds into your name.
- Intensive research. This type of investment takes a lot of work, because you must check everything associated with the lot or property, its surrounding area, the reason for selling, problems with the property, and renovations needed for usage and upgrades.
Be knowledgeable about the pros and cons of where you’ll be putting your money, to determine if it’s worth the investment or not. This way, you’ll avoid any unnecessary waste of assets, time and cash in the future. You may also opt to schedule an appointment with Gerald Eve property consultants to help you with answering these questions when buying your next property.