Five Factors Why One Should Invest in Real Estate

Investing in real estate is one of the oldest forms of investing and involves buying, owning, renting, and resale of property for profit. Real estate comprises of land and the building on it along with the natural resources present. It is an immovable, and generally appreciating asset. If invested wisely, it has the potential to offer good returns over the years.

Here is a tip to keep in mind before you invest in real estate - make sure you check your credit report. You’re probably going to need some sort of credit to help make the real estate purchase. Check whether your credit health is in good standing. If your credit health is not in good shape, take time and improve your credit health and score. This could take a while—anywhere from 4 months to 12 months—depending on the severity of your credit situation but it will be well worthwhile in terms of being able to access a loan quickly and on favourable repayment conditions.

Following are 5 factors why one should invest in real estate:

  • It is one of the basic asset classes that every serious investor should consider adding to his or her portfolio of investments. When properly planned, and executed, it typically offers cash flow, liquidity, profitability, and increases the net worth of an individual.

  • It acts as a hedge against inflation.

  • Real estate investment doesn't require as much close management as most other investment instruments.Wholly owned properties in good shape are relatively less-time consuming investments. Compare it with investments in the stock market etc. where you need to be constantly tracking your portfolio. With real estate, you need to invest your time in researching for the best real estate that would fit your budget.

  • Real estate offers the potential to offer good returns in the form of rentals and improve your cash flow.

  • It offers financial stability and mental well-being as it is generally considered a significant investment with good long term returns.

Real estate investment is indeed a risky business, as there have been some investors that have bankrupted themselves investing in property. However, many people have also profited from real estate. You need to do some hard work, put your time in research, read up articles and blogs on the direction of the market, and make a well-informed decision to acquire the best real estate in terms of your budget and credit restrictions.

Investing in real estate need not be an overwhelming exercise -  once you get to know the basics, you can make real estate work for you.