You are faced with an ongoing crisis. Inflation. And you are not sure how to deal with it. The money that you had saved ten years ago suddenly feels like it’s falling short.
You know that relying on the government for security is not an option, and you need to be meeting your family’s demands while ensuring your financial stability.
Investing in stocks is something you have thought of… but in many ways, the uncertainty and volatility it brings concerns you. Besides, it’s even hard to tell how well a company may perform in the future.
Worrying about your financial security can become stressful. Maybe make you even feel paralysed.
Nonetheless, there is a way out.
And if you are interested in making money, retiring comfortably or securing your financial future, investing in real estate is one of the most secure ways to hedge your risks against an unpredictable economy.
When it comes to investment vehicles, experts say that real estate is safer and falls under one of the more stable forms of investments compared to stocks, gold or currency. Additionally, the learning curve to make smart property buying decisions is also lesser.
Still sceptical about investing in real estate?
Here are some reasons why investing in real estate is the smart and safe thing to do now –
Owning a tangible physical asset
Investing in a physical, real asset means you get to touch it, feel it, and take control of it. Real estate property also counts not only as an income-generating asset but also as having meaningful value.
Hedge against inflation
Hedging is an activity of strategically using instruments in the market to offset the risk of any adverse price movements. In fact, real estate is one of the few assets that react proportionately to inflation. Generally speaking, when inflation occurs, the price of housing, will also rise.
Leveraging institutional support
Unlike other investments which have a proportionately higher degree of uncertainty, banks continue to support and facilitate investing in real estate. This means that you can source capital, make a down payment, and get the returns on the investment. Incredible, isn’t it?
You can increase the value of your property
Unlike other forms of investment that rely solely on the stock market or other outside factors, real estate investments are directly under your control. With real estate, you have the freedom of choosing the location of your property, deciding on the amount of debt you would like to incur and making the kind of renovations that suit your personal tastes.
All these factors contribute towards increasing the value of your property and the returns you can gain from it.
You can build up cash flow
Whether it is individual stocks or mutual funds – we are told the best way to save and invest is to put money on the market. The problem with investing in the stock market is we depend solely on stocks to increase in value.
The benefit of investing in real estate is that you can slowly and steadily build up cash flow from it.
Furthermore, the cash flow from housing will appreciate without eating on your principal investment. Think of it as a stock, where you do not have to worry about your stock value increasing to make significant returns.
As rents go up, your property will also give you more cash flow, while your mortgage payment will stay the same. And this will allow you to comfortably pay off your loan.
Real estate investing will not make you rich overnight. Yet, it is a significant part of a diverse portfolio that you should be considering if you are interested in building true wealth.