Any successful investor will tell you that the best investments you can make is with limited money and high profits. To this end, real estate has historically enjoyed a position of pre-eminence among the investing class as an asset, which never depreciates in value.
Traditional investors who prefer to stay away from stock markets believe that assets like gold and real estate was, is and always be the safest investment opportunities to exist.
While the lure of fast money with stocks or newer assets like cryptocurrencies is attracting a new breed of investors, real estate continues to enjoy a stranglehold in countries like America.
In this article, we look at some factors that are contributing to a resurgence of investor demand in real estate. We also look at some problems and challenges associated with investing in real estate.
5 Important Factors contributing to growth in Real Estate Investments
1, Tax Benefits-
When it comes to real estate investing, many seasoned investors point to the tax benefits offered by governments for investing in real estate. If you calculate the capital gains over a long-term growth period, you will save a lot of money. This is a major reason why most investors always keep real estate in their investment portfolios, not only in America but all over the world.
2, High Profits-
At the end of the day, what matters for an investor is the high profit margins. This is the reason why we invest in different assets. As an area of investment, real estate has always enjoyed a reputation for being a high profit asset. This is truer in the present, when the demand for real estate is growing because of the growing economy. Property prices are skyrocketing in 2020.
3, The Rise of Affordable Housing-
Cities are now growing in the suburbs. Companies are opening offices in these areas, and metro and other transportation facilities are also growing. This has given rise to affordable housing for people who want to own properties and be closer to their offices. This has enabled smaller investors to also get into real estate investing and convert their investments into rental homes.
4, Finance Facilities-
Many banks and financial institutions believe that giving loans for real estate is one of their safest options. They are also more inclined to give financial assistance to real estate investors who are looking to convert their investments by offering rent facilities. The problems of defaulting on real estate is really low according to banks and financial institutions.
5, Growth of Infrastructure-
For a real investment opportunity to appreciate in value, the most important attribute is the surrounding infrastructure. This means if the government is investing in roadways, highways, metro construction, malls and schools then your real estate investment is going to see a sizable increase in valuation.
Challenges to expect in the field of Real Estate Investing
While the above factors make real estate investing attractive from an investor standpoint, investors should not lose sight fact of the challenges and risks. According to connected investors review, Investors need to understand that real estate is a highly competitive area of investment.
It should also be pointed out that some ways of making profits from real estate like flipping do not work in a stressed economy like the post-COVID one. This is why if investors are looking for profits from real estate, they need to wait it out.
In other words, short selling is not something, which you should be looking at. If you are interested in earning quick profits, you should look at other risky assets like cryptocurrencies. Real estate is going to deliver you with high profits, but only when you invest for the long-term.
The Final Word
Real estate is not only a rational choice, but also one, which has a strong emotional connect and appeal. Being an investor in this field is going to give you a lot of satisfaction as the asset is real, tangible and massive in scale. It is not like stocks, which are just numbers and a sheet of paper.
Can you list some of the major advantages of investing in real estate? Point them out in the comments section below.