One is often in a dilemma about the comparative returns of investments from gold, stocks or real estate. Although gold and stocks are easily redeemable investments, real estate is a sector that gives you recurring income if you invest in it. Apart from its capital value that escalates continually, it helps you to enjoy an asset too along with a sense of possession and security. Most importantly, it can be your home. If you have been thinking about investing, real estate investment can be a great option for you and if done prudently it can surpass the returns from all other investments. Let’s look at the benefits of real estate investment.
Enables cash flow
Real estate has this ever enriching characteristic which other investments do not have like the steady flow of a rental income enabling a consistent cash flow month-on-month. After acquiring a property you can expect a steady flow of assured monthly income which the stock investments won’t assure you except periodical returns by the way of dividends.
The growth of the market
As over the past few years the market has already gained momentum and the average growth of real estate market is about 20% and in contrast, the stock market is prone to high fluctuations. Unless you are an expert in trading stock and identifying good quality stocks and portfolios you can suffer a loss as well.
Lesser risks involved
In stocks, there are high chances that you can incur a loss if you do not have enough knowledge of the stock market. Unlike stocks, the real estate market is prone to lesser risks as you have to do your homework before purchasing a property. In the real estate parlance, it’s quite inevitable that you obtain prior information and do adequate due diligence before you finalize any deal.
Contrastingly, also if you find the deal not suitable or worthy you can always sell the property and get out of the deal. But in case of stocks, the investors can minimize risks by investing on the low-risk stocks but eventually, the stocks that are high on returns would attract more investment and are inevitably high risk in nature. This possibility can turn out to be a bad proposition and investors can lose money if the stock prices fall.
Buying a property often entails an emotional satisfaction and a sense of security and social reckoning which is absent in other forms of investment. Buying a home gives the owner a sense of security not only for himself or herself but for the future generations too. This kind of a satisfaction associated with real estate investment often makes realty sector the king of all the investment options.
Financial leverage is another great factor as most of the times you don’t have to pay the full amount and can own the property with just 20% of the property cost. This favorable ratio of the marginal investment to the total cost of the property offers a financial leverage and this can be highly advantageous for the investors in markets with ascending prices. This kind of advantage is not tenable in other forms of investment like gold, bonds, or stock.
Unlike other forms of investments except for gold, real estate investment is tangible. You can touch, see, feel, and sense in which there is a sense of pride attached but stocks and bonds are virtual in nature. This feature of real estate investment has an element of possession which makes it more exciting and lucrative than other forms of investments.
- If you have been thinking about investing, real estate can be a great option for you and if done prudently it can surpass the returns from all other investments.
- The real estate market is prone to lesser risks if you do your homework and due diligence before purchasing a property.
- Owning a home renders a sense of security for you and the future generations and this kind of a satisfaction associated with real estate often makes realty sector the king of all the investment options.
- Real estate provides a favorable ratio of the marginal investment to the total value of the property allowing the investors to enjoy the property without making the full investment.