Real estate is one of the first investments you should make if you plan on becoming financially independent.
Many factors make it a wise choice for the patient investor.
But you should also look into other factors before pulling the trigger as other factors also weigh in whenever you want to own a piece of land.
Below you will see the great opportunities that will make you decide to invest in real estate. You will also see factors that will help you decide to hold back for a little while. This information is for you to decide on so that you can make an educated decision.
PROS
Real Estate Rarely Depreciates
This is the primary reason why most people choose real estate as an investment.
Since people must always need a place to live, real estate is a necessary asset.
The potential for steady cash flow comes from residential and multifamily housing. And that’s the holy grail of passive income. The family will grow into the facility, and then you will have an additional source of sustenance.
While other investments tend to lose value over time, land does not depreciate.
Investment such as an apartment complex can increase its value year after year which creates more equity for the owner.
Tax Incentives
This is the perk of investing in real estate. This comes into play the longer the structure has stood for a long period.
We know that the land will not decrease in value. However, the building and everything inside it will depreciate. But this is where the good thing comes into play. Tax laws give the owner rights to take a deduction for the structure’s depreciation.
Fixed Income
Robert Kiyosaki is famous for advocating investment in real estate and building rental properties. And it makes sense as like what was stated above that people will always need a place to live or need a place for their business.
This is steady and passive cash flow for the investor.
Long-Term Investment
If you’re planning for your retirement, you need to add real estate to your list. In due time, the land will multiply its cost. So, if you acquired land or a property in your 30s, by the time you retire, the land would cost more than when you first bought it.
CONS
Time Is a Factor
If you are looking into investing in real estate, you have to be patient. It will be time-consuming if you plan to sell or rent out properties. You might go for a month or so before finding a good deal.
Land Is Not Liquid Asset
You cannot liquidate it immediately in case you need emergency funds.
Real Estate Is Not Cheap
You will need a deep pocket to get started in investing in this industry. Price also varies depending on the location and market stability. Your real estate is only worth what someone will pay for it.
You Deal with Tenant and Maintenance Issues
While most businesses will have maintenance issues, it would cost more to repair broken appliances in a rental facility.
Owners must have extra funds for maintenance kept in case this happens.
These are factors that you can consider before investing. It would also help to find an expert who has a wide range of experience in this industry. Don’t jump in blindly and buy something expecting a return on your cash. Make sure to learn all the ropes to get the most return from your investment.
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