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Here are 8 good reasons why you should start investing in real estate:
1. Long-term capital growth and protection against inflation
While the property values may fluctuate in short-term, real estate prices tend to follow inflation rate and wage growth over the long term. For example, Case-Schiller index measuring US housing prices increased 3.4% a year during 1987 – 2009, and the average annual inflation rate was 2.9% during the same period.
2. Security
Real estate is a safe investment. Even in the worst-case scenario, your real estate keeps producing some rental revenue.
3. Regular cash flow
Your leased out property will produce rental revenue, that can be used for making new investments or covering your daily living expenses.
4. Low volatility
While the long-term equity returns are very attractive, stock markets remain quite volatile and may do more harm than good to the inexperienced investor. Real estate is significantly more stable asset class, being able to earn rental income even during the recession. The reason behind real estate’s lower volatility arises from the fact that real estate transactions require significantly more time and money than buying and selling shares, so the number of transactions is significantly lower and the deals are more prudent.
5. Control
Real estate investment decisions are generally made by yourself. You can to choose between different real estate asset classes (residential, commercial, retail, industrial, logistics, accommodation, etc), and leverage the investments according to your individual risk tolerance.
6. Real estate is more understandable than financial assets
It is relatively easy to estimate the real estate’s lease income and the costs of owning and maintaining it.
7. There is always some room for negotiation
Unlike equities, bonds, commodities or precious metals, real estate prices have always some room for negotiation.
8. It is easy to start investing into real estate
Real estate investing is theoretically quite simple – all you need is lots of cash and time. Just pick and buy your property, and start leasing it out. Real life is a bit different – majority of people do not have enough free time or money to become real estate investors themselves.
Real estate crowdfunding gives you an access to professionally managed real estate investments. You can start with just 100 euros and a few minutes of your time!
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