- Real estate provides better returns than the stock market without as much volatility.
Historically, the risk of loss is minimized by the length of time the property is held.
When the market improves, so does the value of your home, and as a result, you build wealth. Risk never changes in the stock market and there are numerous factors beyond your control that can negatively impact your investment. Real estate gives you more control over your investment because your property is a tangible asset that you can leverage to capitalize on numerous sources of income, while enjoying capital appreciation.
- Real estate has a high tangible asset value.
There will always be value in the land (land), and in the value of your home (construction). Other investments may leave you with little or no tangible asset value, such as a stock that may drop to zero or a new car that declines in value over time. Homeowners insurance will protect your real estate investment, so be sure to get the best policy available so your asset is protected in the worst case scenario.
- The value of real estate will always increase over time.
History continues to show that the longer your property is maintained, the more money you will make. The real estate market has always recovered from the bubbles of the past that caused home appreciation to slide and for those who held on to their investments during those uncertain times, prices have returned to normal and appreciation is back on track. Now property investors in the higher yielding markets are enjoying a windfall profit. In fact, last year, every state in the nation had a positive appreciation and some of my clients in the Los Angeles market have earned millions of dollars in less than a year from the change.
- The value of real estate will always increase over time.
A real estate investment can also diversify your portfolio. If you’ve ever talked to a financial planner about investing, then you’re well aware of the importance of diversification. When you diversify your portfolio, you spread the risk. Real estate will always serve as a safe tangible asset to mitigate risk in your portfolio. Many have accumulated wealth by investing only in real estate.
- Last but not least, investing in real estate comes with numerous tax benefits.
You can get tax deductions on mortgage interest, cash flow from investment properties, operating expenses and costs, property taxes, insurance and depreciation (even if the property gains value), and other benefits. The end of the year is a very busy time for real estate because people want to take advantage of the many tax benefits before the year is out!
An investment in real estate is not only a safe financial investment, it is also an investment that can provide years of fun, happiness and priceless memories that will last a lifetime.
Translated from the original text by
Guest Writer at Entrepeneur.com
James Harris
Co-Founder, Bond Street Partners
