Some types of business come and go. Like a display in a fashion boutique, the hype dies after a certain period of time. If you’re looking to invest your money into something profitable and is always in high demand, you will never go wrong with investing in the real estate business.
On Forbes you can read that real estate is an overwhelmingly stable investment. Even if you’re simply buying a property now to sell or lease it in the future, it will retain and even increase its value.
To understand why investing in real estate business is at all time high, let us look at the trends for 2018:
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Prices of Home are still on the Rise
- Home prices have increased by 5% and 10% per year over the past decades. This trend is most likely to continue in the coming years.
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Home are Selling Faster
- Despite the increasing prices, homes are selling fast. In 2017, homes in the U.S. were sold at the fastest rate ever, when it only took an average 78 days to sell a home.
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Marketing has gotten easier with VR
- More and more real estate professionals are utilizing virtual reality in marketing their assets. VR, potential buyers can virtually tour the property anytime. This means the property is open for viewing 24/7 (and the seller or agent doesn’t have to be there!) making the process easier, more efficient, and such a time-saver.
Why More and More People are Investing in the Real Estate
ROI is easy and quick.
In real estate, there are many paths investors can take in order to earn money fast. They can buy shares from well-established real estate companies, lease their home (or a part of it), become a real estate manager, or put their hands in the home construction industry.
Getting started is easy.
At the onset, real estate investing might sound like a very expensive undertaking. But actually, there are many ways to get started without breaking your bank or seeking financing. One example is crowdfunded real estate investing. Many people choose to go with real estate investing companies because they get access to all they need – education (training), tools, and resources to get started.
Real estate has a high tangible asset value.
Whatever real estate property you purchase – land, home or a commercial building – it will always have a tangible value. It even has higher returns than capital assets like bonds or stocks. Having tangible assets can reduce your exposure to overall market risk.
Long-term opportunities.
Investing in real estate brings you long-term earning opportunities. Let’s take for example property leasing. Supposed you buy a home worth $200,000, which you can rent for $1,500 a month. If you obtain a mortgage for say 30 years at 5% interest rate, your monthly due is roughly $582. By renting out your property, you have a steady cash flow of roughly $700 after deducting taxes, home insurance, maintenance, and other related expenses. That money goes straight to your wallet!
You can leverage your capital to multiple your earning potential.
In real estate, you can use various financial instruments, even borrowed capital to expand your investments. A basic example is securing a mortgage wherein you can borrow money from the bank to leverage the purchase. If you’re investing in crowdfunded real estate, you need less capital and sometimes, online cash advance is sufficient to get the fund you need to get started because you will be operating within partnerships.
You have full control over your investments.
When it comes to earnings, you are in full control of your real estate investments. You have several options to increase your sales and find better deals. If the industry gets more competitive, you can compensate by increasing advertising. If the value of your property drops (which is less likely), you can wait until the value goes up again.
You can have someone pay your loan for you.
In addition to having a steady income, your loan pays down too. By renting out your property for instance, you are literally having someone pay for your mortgage, which in turn increases your net worth each month.
There are tax benefits too.
One of the major benefits of investing in real estate is getting tax exemptions from owning a rental property. You are also entitled to lower tax rates for your long-term investments.
Final Words
The real estate business is always in high demand for the reasons stated above. Many people hesitate to explore this industry because it seems like a lucrative business option. But the truth is it’s not. The real estate industry has evolved so much that it doesn’t only involve buying properties. From investing in stocks to renting your existing property, flipping houses, and managing other people’s properties – you can take advantage of the many benefits of starting your own real estate business.
