A part of growing up is knowing where our money goes. To some, it belongs to the bank, to others it belongs to different types of investments. Everyone knows that in order to grow your finances and achieve financial freedom, you must invest some if not all of your money into something that increases value in time. This may be in the form of stocks, cryptocurrency, and even real estate. To the average person, this may seem like a risk.
But those who are incredibly wealthy have invested so much of their money because money in the bank doesn’t grow. Though investing isn’t everyone’s cup of tea, it’s something that everyone should think about. The truth is that putting your money where it can be stagnant is only playing it safe, but looking at it from a long term point of view, it may not be the best choice.
We truly believe that investing your money at the right places will definitely give you an advantage in life. Investing early might just give you a reason to retire early too. Wouldn’t that be nice?
One of the greatest investments is real estate as it can generate passive income and can be a great long-term investment. Many who have invested in real estate have proven that through this form of investment, they began to build their wealth. Unlike cryptocurrency and stocks, investing in real estate requires a big chunk of money.
A financial mortgage advisor does not recommend this type of investment to those who are starting their careers. However, if you are responsible enough and know you have enough money to invest, this can be one of the best things you could ever do financially. All this talk about real estate investment has probably inspired, if not motivated you to look into real estate.
Though there are many positive outcomes to this, there are also negative ones and it is up to you to decide whether it is worth your time. Luckily, this article will tackle everything you need to know and will be a helpful guide to start your investment journey. Read more to find out.
Reasons Why You Should Invest in Real Estate
If you aren’t convinced yet, there are many other good reasons why investing in real estate is a good idea. You might be considering other forms of investment. The stock market is another great way to invest but it risks you from losing more money, unlike real estate. Although your financial situation can greatly affect your choices but here are a few reasons why investing in real estate is a better option for those who can afford it:
- Ownership of a physical property – Unlike stocks or cryptocurrency, real estate gives you the opportunity to own a land or property. Looking at it at a long term stand point, real estate can increase in value over time. You can either rent it out which gives you the option to reside in a home when you no longer choose to rent it out, or you can sell the property upfront. Ultimately, real estate is a tangible asset that can be controlled and can be countable.
- Generates passive income – If you choose to rent out your property, you can easily earn money on a monthly basis, and can increase in value each year.
- More options – Unlike other investment options, real estate can be invested in many ways. You can buy a property and sell it up front, or you can also flip it and make it look liveable and rent it out. Airbnbs are also a big thing nowadays, and most homeowners generate more money because of this. According to Daniel Lesniak, founder of Orange Line Living, real estate can be refinanced, rehabbed, and rezoned. You can develop it, lease it, subdivide it, or add parcels to it.
The Cons of Investing in Real Estate
With pros come cons. Everything in life has a downside, and investing in real estate isn’t exempted from that fact. To make the right decision, it is essential to know the downsides of investing in real estate. Here are some things to take in mind:
- Requires more money – Since real estate is a physical ownership, it requires putting down a large amount of money upfront. This is unlike stocks and cryptocurrency that anyone can start even with little investment. So before deciding whether to invest in real estate or not, make sure that you have enough money to afford it.
- Time Consuming – Not only do you need to spend time learning about real estate strategies, but you also have to wait for people to buy off what you invested in. There is no deadline to this, as it all depends on the clients you are handling.
- Investing at the wrong time – It’s not everyday that real estate is a good idea. It also requires learning about the economy as real estate prices can go up or down depending on the year. This can mean that you might have a chance to buy real estate at the wrong time and at the same time, lose more than gain money from what you invested in.