There are numerous benefits to investing in real estate. Research shows that real estate investors can enjoy those benefits, including predictable cash flow, tax advantages, and great returns.
But despite the clear advantages, many people can be hesitant about getting into real estate investing, believing it to be more complex than it is.
This is where having the knowledge and support of a reputable Hamilton real estate agency that has experience working with real estate investing clients can be advantageous.
If you’re considering investing in real estate, here are the benefits and what they can do for you.
Diversify Your Portfolio
If you’ve invested in stocks or other investments but don’t want to put all your eggs in one basket, real estate is a great way to diversify.
Having your money spread out in different markets will lessen the impact if one of the markets experiences a crash.
Increase Your Cash Flow
Real estate is one of the few investments that provide cash flow. With other investments, you invest it, and that’s where it is. You can only access it by selling. Real estate allows you to buy and hold, and you can earn money through rental payments from tenants.
If your expenses are less than the rental amount, the rest is your cash flow, which can be used in whatever way you want, whether that’s savings, bills, or growing your portfolio.
A Tangible Asset
Stocks and bonds are intangible assets. When you invest in them, you basically have a piece of paper saying you own something, and if there is a market crash, your money essentially disappears. Real estate, on the other hand, is tangible.
While values can go up and down just like with stocks and bonds, there is a value on tangible assets that remains.
It can also take much longer to buy and sell real estate than it does with stocks and bonds because it’s a physical asset and is subject to certain legalities and regulations.
There are no guarantees in life, but the chances are good that a real estate investment will appreciate if you hold on to it long enough. More often than not, buildings and the property they’re on appreciate and make the asset worth more than your initial investment.
You can also decide to invest more in your investment by conducting renovations and improvements around the property, which often cause the value to increase. By doing this, you can force appreciation to happen faster than it would naturally, something difficult with other types of investments.
There are many good reasons why you should invest in real estate. If you’re looking to diversify your portfolio, increase your cash flow, hold tangible assets and see your investment appreciate, consider dipping a toe into real estate investing.