10 Reasons Why Real Estate is an Excellent Investment

Row of block houses to represent real estate investment strategy

Throughout history, those who control the land and own the most property have been the wealthiest people. That is as true today as it ever has been. Real estate is—and always will be—one of the best investments you can make. When you own property, you are on your way toward financial freedom.

Here are 10 simple reasons why real estate is such an excellent investment:

1. Long-Term Value

Over time, real estate value almost always goes up. There may be dips in the market and times when the property underperforms, but over the long run the value is just about guaranteed to go up.

2. Built-in Appreciation

The population is always growing. People need places to live, work and play. This causes a natural rate of appreciation—along with inflation and other economic factors—that keeps your real estate holdings worth the long-term investment.

3. Forced Appreciation

In addition to the natural appreciation that happens with time, you can force the appreciation yourself. This is what happens when you purchase a fixer-upper and then renovate it. Whether you then rent out the house or resell it for profit, you are forcing the appreciation through your efforts and thus increasing the value of your investment.

4. Passive Income Opportunities

Experienced buy and hold real estate investors know all about the benefits of passive income. You hold onto a property and rent it out, earning a regular “passive” income through rent payments.

5. Tax Advantages

Owning real estate brings a number of important tax benefits. Whether it is your primary residence or an income-producing investment property, there are various expenses you can write off as a property owner that will help your bottom line.

6. More Affordable Than You Think

Many people avoid investing in real estate (beyond just owning their main home) because they think it’s too expensive. They don’t want to get into further debt or just assume they can’t afford to own a second home. Smart investors know that there are many ways to secure funding for properties and that these investments pay for themselves—and then some—over time. The real question is: Can you afford NOT to invest in real estate?

7. Others Essentially Pay the Bills

One way to look at real estate investment is to realize that other people will essentially pay the bills. For example, let’s say you buy a house and rent it out. That rent cover should cover all your homeownership expenses, and often brings profit on top of that. Even if you break even, you will come out ahead over time because of the property’s appreciation. The same is true for house flippers who will have to put in time and money upfront to renovate the property. However, their bills are paid when the house is eventually sold with a healthy profit!

8. Easy to Insure

Property insurance is easy to get and real estate as a financial asset is generally much easier to get insured. This can help you protect yourself more in case anything does ever go wrong.

9. Asset Tangibility

In addition, real estate is a tangible asset. You have the deed to a property, whether it’s raw land or there is a physical structure (house, residential development, commercial or industrial) in place. This tangible property is nice to own because you can see it, touch it and know it’s there. The same can’t be said for some intangible financial assets and investments.

10. Easy to Liquidate

The nice thing about real estate is that it is usually pretty easy to sell when the time comes to move onto your next venture. Real estate will always be valuable and desirable, so most properties are fairly easy to liquidate.

These are just a few of the benefits of property ownership. Real estate is a great investment opportunity that any success-minded person should consider. Whether you are looking to earn a little extra income on the side, you are saving for retirement or you decide to make real estate investment your full-time career, you should explore your options and see how buying, selling and renting houses can benefit you financially.

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