6 Reasons Why Real Estate is Still the Best Place to Invest

6 Reasons Why Real Estate is Still the Best Place to Invest With a world of options available to today’s investor, it can be hard to know what will produce the greatest bang for your buck. What follows are the reasons why, in my opinion, real estate is still the investment champ. Real Estate Investment

1. Real estate offers a significant human service.

Shelter is one of humanity’s most basic needs. As a landlord, it’s an honor to provide a safe, secure, and dry space for others to live and love and work and build relationships. Showing genuine care for tenants, taking pride in a property, and maintaining it with dignity can create great satisfaction.

2. The demand for real estate is permanent.

People will always need a place to live or work, meaning your investment property will always have interested renters or buyers. Housing is not a fad, land will always have value, and the demand for real estate will not go away.

3. Real estate offers a measure of control.

As an investor, you have the power to set rental rates, screen renters, determine upgrades, and even choose the paint color. You can physically see and touch your investment, inspecting it as you wish. Other investment classes, such as the stock market or venture capital, offer limited control and transparency — sometimes almost none at all.

4. Real estate investments create passive streams of income.

To acquire a desirable property is to acquire a (generally) permanent and ongoing flow of passive income. Even if you don’t net a dime of positive cash flow in the short term — meaning all you’re doing is breaking even on expenses each month — the payments made against the mortgage principal mean you’re steadily building equity.

The more you replicate this activity, the more equity gained, even if your chequing account looks as tight as ever.

5. Market appreciation is reliable over the long term.

Sometimes the market is hot, like three years ago when our Pacific northwest home appreciated over 30% in one year. Sometimes it’s cold, like this year and for the foreseeable future as rising interest rates lower the purchasing power of buyers and the market predictably sags.

But regardless of the ebbs and flows, North American real estate shows a steady appreciation over time. Choose any 10-year window in any market and you’ll find measurable appreciation. In real estate hot spots where mountains, ocean,

international boundaries and other factors combine to limit the growth of new development, market appreciation is even more of a guarantee. And when the market explodes forward as it did in the Lower Mainland of BC in 2015, the equity gains can make anything in the stock market pale by comparison.

6. Investment property improvements are tax-deductible.

Let’s say you invest $20,000 to upgrade your kitchen in your own home. It looks great, and you love the upgrade, and it may even add market value to your home — but there’s no tax advantage to be realized there. On the other hand, when you make similar improvements on a rental property, those investments count against any taxes that you would normally pay on your rental income.