Real estate has always been considered a stable investment, but it’s also one of the best long term investments you can make says AG Morgan Financial Advisors. Here are four reasons why real estate investment is great:
It’s tangible
A real estate investment is tangible. The property can be seen and touched, making it a tangible object. It’s not an abstract concept or something that doesn’t have any substance to it, unlike stocks and bonds.
Demand always increases
As you look at the history of real estate investments, you will see that demand has always increased. In fact, if we take a look at historical data on residential and commercial real estate prices in Canada and the United States over the past 60 years, there are only two years (1974 and 2008) where prices fell. This means that on average, real estate investments have performed well throughout most of their history.
However, when looking at just one year or even five years of data does not show us how investment performance is likely to perform over time. What we need is long-term analysis to fully understand how investments work over time periods longer than just one year or a few years.
Real estate is a low-risk investment
Real estate is a tangible asset that you can touch, feel and see. You can be confident that your investment won’t be eroded by inflation. No matter what happens in the economy or market, there will always be a demand for housing investors can count on to bring in positive cash flow. As long as there are people needing homes and apartments, real estate will continue to appreciate and generate income for you.
You can build equity
As a real estate investor, you can build equity in your properties by buying low and selling high. This is called the “buy-low” strategy. If your investment pays off, then you will be able to sell it for more than you bought it for—making a profit on top of building equity as well.
The second way to build equity as an investor is by paying off your mortgage at an accelerated rate. Just like with any other loan, having less debt will make it easier to get new loans in the future and improve your credit score over time if done correctly.
Real estate is a great long term investment.
Real estate is a great long term investment. Real estate is tangible, unlike stocks, which are not. Real estate investments are low risk investments compared to other types of investments such as the stock market. With real estate investment you can use cash flow as an advantage to help pay down your loan faster and build equity faster than you could if you were a renter in another home or apartment.
Conclusion
Real estate is a great investment. It can be used to build your wealth, create passive income, and diversify your portfolio. But at the end of the day, it’s not just about investing in real estate—it’s also about being smart with your money.
