You can buy the most expensive shoes, clothes, top of the line mattresses, bags or cars. But a common fact about all these is that they can be stolen, burned and their values depreciate over a very short period of time. The same thing goes with jewelry and gold – except their value appreciates – they can be stolen and it’s like a good kick in the behind when it happens.
Investing in stocks is another high yield option. However, the risk is significantly higher as well. Too many economic and business factors are in play which makes it volatile. While a lot of people made their fortune through stocks, it requires more technical know-how, a lot of courage, some impeccable timing, and a sprinkle of luck to be successful.
On the other hand, investing in real estate offers better potential to get the return of investment along with good profit on top. This is NOT to say that ALL real estate investments turned out to be success stories. Research, observation and timing are all critical factors to successful real estate investments.
There are a lot of reasons you will find online about why you should invest in real estate, there are four that stand out: Cash Flow, Appreciation, Stability and Inflation Hedge.
Picture yourself in your twenties earning a pretty decent salary and your goal is to retire in your 40’s. With the money you’re making, you have the capability to mortgage a commercial property for an X amount of money over 10 or 15 years. With the right real estate to invest in, you can ensure positive CASH FLOW by renting your property. Not only are you able to earn money to cover your mortgage, but you can also start buying your next property with the profit you’re earning from rent. However, you need to avoid the pitfall of not including maintenance costs. On average, a wise property investor will save at least 10% of the rent to cover maintenance items.
Over the course of a real estate mortgage term, the value of your property investment is due to APPRECIATE. Here is why it’s very important that you pick a very good property to invest in. The appreciation value of your asset could increment two-fold (or more) over time. It is safe to say that value appreciation is the top reason to invest in real estate.
Properties are assets which value grows steadily, and without significant fluctuations in its value. Therefore, making it one of the very few investments that present STABILITY in most economic situations.
Another good reason why properties are such good investments is that they are good assets that can be used as INFLATION HEDGE. As inflation decreases your purchasing power, inflation hedge protects you from it. Typically, the values of homes and rents rise in times of inflation.
Investing in real estate is surely a great way to grow your money and get wealthy. But more than the money, you equally need to invest your time, dedication and patience to make your real estate investment journey a complete success.