Why Real Estate Investing is so Popular

July 11, 2018

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Real estate is a physical asset. It is stable and its value appreciates over time. If the mortgage payments are made properly and insurance is okay, it is very unlikely that one would face total loss by investing in real estate.

When the market is down, there is money to be made in the real estate sector. Real estate is a long term investment which makes it less volatile than other investment options. People will continue to need houses as long as civilization exists. When the market is down, real estate is a good option because one can strike a better bargain.

Depending on the type of real estate and how it has been acquired, the investor may start getting returns on the investment immediately. This could be in the form of rents or moving from a rented house to own house thereby saving on the house rent.

When you buy a property with loan and rent it out, you are paying the mortgage EMI with the house rent. So you are essentially building equity while someone else pays it for you. This makes investing in real estate an attractive option. And when the mortgage is paid off, you obtain the full ownership with no liabilities. You can also sell it off then to get back the money you(and your tenant) invested and more due to appreciation.

Price appreciation is the second benefit of real estate investment. In most markets real estate prices increase with time. So when you purchase a house the price you pay is more often than not, less than the price you get when you are selling the property. This is another reason real estate is a favorable investment.

Thirdly, investments like shares and mutual funds are prone to market ups and downs. When the market crashes, people who have invested in them can face a huge loss. But with real estate a person can always wait for the market to recover again since it is a physical asset. All these reasons make real estate investing so much alluring. However it is a long term investment and decision has to be taken wisely.