Real estate investments are often a great way to secure old age. Here are the top reasons why you should invest in it
7 Reasons You Should Invest In Real Estate Market in 2021
Many successful people choose to invest in real estate as their primary source of wealth. Celebrities like Kylie Jenner, Tom Ford, David and Victoria Beckham and many others have invested in real estate.
Here, we present you with 7 main reasons why you should think about investing in real estate. But before diving into it, let’s discuss some numbers.
Real Estate Market Analysis
Real estate trends can vary from season to season and from one area to another. According to Millionacres, property prices rose by 11% during 2020. In general, the prices rise because there are high demand and low supply on the market.
Price, in its turn, doesn’t always influence the affordability of the property as we saw property-buying power going up by 21% in 2020. This can be explained by inflation, higher incomes, and interest rates on the market.
Major organizations like CBRE predict that there will be a substantial shift in the real estate industry by 2030. Within the next decade, AI systems will make it much easier to analyze the market and calculate a successful investment.
As the global population increase, land and space will become more valuable. According to CBRE research, the multifamily housing sector will soar from $7 trillion to $27 trillion by 2030. This means that if you start investing right now, you will get a chance to quadruple your invested money.
Well enough of that chit-chat, here are the reasons you should make real estate your go-to investment.
The Safest Investments You Can Make
Unlike in the popular game “Rock, paper, scissors”, in the real estate business – rock always beats paper. In other words, money under inflation can lose its value, but buildings, on the other hand, usually immune to inflation, making them a great thing to purchase.
Material things like property will always be relevant since Earth’s population is steadily going up and so is people’s need for housing. That is why you can be sure that your property won’t lose its value as more buildings appear on the horizon, unlike real money which can get devalued when more money is being printed. If you want to save your value – invest in the property.
If you are not convinced yet, then continue reading because it’s just the tip of the iceberg.
Property is a tangible asset that you can leverage to capitalize on various revenue streams while experiencing capital appreciation. Because of that, real estate gives you more control of your investments. You can always increase the value of your property through direct efforts and investments as well. The world is your oyster when it comes to real estate management.
Different Ways of Investing
There are different ways to invest in property. Real Estate Investment Groups (REIGs) areone of the most popular ways is investing in real estate. REIGs work by purchasing and building accommodation and allowing investors to enter the group by buying their apartments. As an investor, you free yourself from any management and maintenance work by giving the group a percentage of the monthly rent. This is especially convenient for those who don’t have time for managing their property themselves.
The second option is Real Estate Syndications. Real estate syndication involves a bunch of investors collectively buying a real estate asset. The members of the real estate syndication search for a deal, arranges financing processes, and manages the investment. Passive investors gather the capital in exchange for equity in real estate.
Other ways to invest in real estate include:
· Real Estate Crowdfunding
· Real Estate Investment Trusts
· House Flipping
Less Market Fluctuations
In contrast to the stock market or any other markets, the property market does not tend to fluctuate that often. Investment values will not increase or decrease in a short time. This means that to get the most return for your investment, you should make long-term investment plans.
You can always find lucrative real estate investments no matter what the market is doing. But it can be quite challenging to finding a decent bargain when it comes to a sellers’ market. That is why you should pay attention to profit margins.
You Will Pay Fewer Taxes
Governments support real-estate investors and taxation is not an exception. Property investors tend to pay fewer taxes than any other citizen. It is because investors help to increase the value of developing land by providing housing for the masses. Here are some of the advantages you can get upon becoming a property investor:
· mortgage interest tax deductions
· depreciation deduction
· maintenance, cost of repairs, and upkeep
· cost of services (legal consultation & rental property management)
· property tax deductions
· travel costs associated with the property
Regardless of the country you live in, you will be stunned at how many privileges are given to real-estate investors.
You Can Earn Passive Income
Having an apartment in Downtown Dubai to rent out can single-handedly provide you enough income to live for the rest of your life. People want to live in the center of the cities and there will always be need for luxury real estate. That is why people are ready to pay the high rental fees because the idea of wasting up to 2 hours on everyday commutes from the edge of the city is more intimidating.
Competitive returns on property investments hinge on a wide range of factors such as location, management, and asset class. However, most of the investors set their sights on beating the average annual return of 11%. For example, last year, the AAR amounted to 18% which means that on average investors have managed to increase their returns. Due to the increasing need for housing, we expect this pattern to follow in the upcoming years.
Investing in property is always the right decision. However, the reality is that it can be quite challenging to build capital off properties without having a reliable partner in your corner. That is exactly why companies like Matropolitan.realestate exist. First-class specialists at Matropolitan are always ready to consult you on premium real estate investments. Whether you want to start slow or go big, Metropolitan has all kinds of properties for you to invest in.