Investing in Real Estate? Know the Upsides and Downsides!
It's essential to know the pros and cons of a piece of real estate, it. Experts love to put their money into property. How come? What do they know about real estate investment that most of us don't? All real estate investment platform options have their own pros and cons. This is important if you want to know how much risk you need to take with each investment. The amount of risk experts take when they invest in real estate varies. Most investors can only put between 10% and 70% of their portfolio into real estate investments. So, how do we decide if our exposure should be 10%, 70% or somewhere in between? This will happen when we understand the pros and cons of investing in real estate. The Pros of Real Estate Investment We all know the benefits of real estate investing and that it can be profitable. It's one of the kinds of investments that can really bring in a steady stream of passive income. Here are the essential reasons why you should buy an investment property: Enables Asset Diversification Real estate has almost no direct relationship with equity, debt and other popular paper-based assets. In fact, it has a difficult relationship with things like stocks, gold and other valuables. This means that the first benefit of real estate is that it helps you spread out your assets. The growth in value of a real estate portfolio has little to do with the growth of other types of assets. When the stock market is doing badly, it is common for real estate to do well. Even if an economic boom is coming to an end, real estate would still be a good investment. A Quick Dual Income Like stocks, real estate also gives you the chance to make more than one income. Dividends from stocks are a quick way to make money. In the short term, you can get rental income from real estate. But rental income is much more stable and easier to plan for than dividend income. Long-term, both stocks and real estate can help your money grow. Stocks can deliver quicker appreciation. In the long term, the value of real estate increases more slowly but steadily. Grand Inflation Hedge When you add up rental income and value growth, they beat inflation by a long shot. Real estate property is the only investment that consistently beats inflation. In fact, it's not fair to think of real estate as the only way to protect against inflation. If you invest your money in real estate the right way, your returns will be much higher than inflation. The Cons of Real Estate Investment