Investing is one of the biggest financial decisions you will make in your life. With a plethora of investment options available, it can be very hard to predict which one will pay-off. But it certainly has a lot to do with your passion and the resources available for you to work with. That said, you might be wondering right now on where to invest your hard-earned money. And it can be a pressure to make wise decisions.
As a financial advisor for more than three decades now, I urge my clients to consider investing in real estate and that’s what I recommend to you, too. Real estate is a smart place to invest because it grows over time. Even if borrowing rates and inflation fluctuate, it’s undeniable that real estate is still one of the best places you can invest. Here are 6 reasons why real estate is a smart choice:
1. Financial Security
If you want to be financially-secured for the long term then real estate should be in your basket of investments. For example, owning a second property that you can rent out, would be very profitable. While you are bringing in rent money every month, your rental property is increasing in value over time. So, as you are paying down your rental property, the value of it is going up. Now, think about how much money this will bring you should you sell your property years down the road.
2. Inflation is your Friend
Economists explain inflation drives up home construction costs as well as rents. Just as the value of the property rises with inflation, the amount that tenants pay in rent also increases over time. Inflation causes the cost of living to go up, so everybody raises their prices too. This means that you stay competitive raising your rent, which makes you even more money.
Population growth also creates housing demand and drives up rental prices when supply cannot keep pace. This allows real estate investors to keep up with the rise in prices across the economy. Unlike other investment accounts, real estate investments offer a great return.
3. You Get to Make Your Own Decisions
Becoming your own boss and making all of the decisions without someone else looking over your shoulder sounds great. Well, if you own rental property and there are decisions that need to be made, you are the one who will make all of the decisions. That’s right, as a rental property owner, you get to call all of the shots, right or wrong. But be mindful of the greater accountability ahead for yourself and the future.
Some people may attempt to discourage you from investing in real estate but you should learn on your own. Plan out your moves and listen to those with successful experience in the industry.
4. You Can Grow Your Portfolio
There are many people looking for smart places to put their money, real estate investing offers a low risk, high return choice. It isn’t a get-rich-quick scheme, but a long-term strategy for creating a solid financial foundation. Investing in real estate gives you the advantage of owning a tangible asset that puts you in control. So, as the demand for rental properties continues to grow, consider real estate as one of the best investment decisions you’ll ever make.
5. Steady Income
Real estate investment is one of the best avenues for building wealth. Most people who invest in real estate do so, so they can enjoy a steady flow of cash. This passive income is a huge incentive to take the leap and invest in real estate.
You start slowly by purchasing one rental property and then you build up from there. The rate at which you increase your rental properties is all up to you. Don’t forget that there are prime locations where you will want to buy.
6. Safest and Most Profitable Investment Option
People who want the best long-term investment assurance consider real estate investing as their top choice. Compared to investing in stocks and shares, the risks associated with it are much lower. There have been instances where people became millionaires and billionaires through investing in real estate. As the population will grow through the years, so will the demand for rental properties. Return on your investment will continue to grow in the long term as well.
Real estate is a safe long-term investment. Even if prices fluctuate and drop over the years, history shows us they will come back up again if you just ride it out. In the meantime, you are still collecting rent every month and the amount you owe on your rental property is decreasing. Either way, you will get a great return on your investment.
With these numerous advantages of real estate investments, you should take the time to learn the ropes and be sure that you understand how things work in this industry. You will find yourself in a good position to reap what you put in. Bear in mind that investing includes risks and will require strategic planning to be successful.
Daisy Raouph, CLU, CHS, specializes in mortgage financing solutions and financial services. A Mortgage Broker and Financial Security Advisor with over 30 years of experience in financial services. Contact us today to review your mortgage financing options. We can help!