Investing in property seems like the best investment as you can enjoy long term returns from this investment. A person who is thinking of real estate investment should explore both sides of a coin, aka the pros and cons of this investment before taking this first step toward the real estate market.
Pros of Property Investment
Here are some benefits that make this option very lucrative in the eyes of investors.
Less Risk – When you take less risk, you always get less return, which is a standard rule of finance. The real estate market is less volatile in comparison to the stock market. If the economy shifts, its adverse effects on the stock market are higher than in the real estate world. If you are a risk-averse person and looking for a good deal, then definitely investing in property is indeed your best choice.
Tax Deduction – When you invest in a property, then another advantage you get is a tax break. All expenses you made in terms of your features are deductible from your annual tax report, and it’s a perk that everyone likes to make the most from.
Excellent ROI
Buy a property and then put it on rent; it is the simplest way of earning steady income monthly from a building. There are many other ways you can make money from your real estate investment, though rental is the easiest and most common choice among people.
Cons of Property Investment
Here are some negative aspects that you should consider before buying or mortgaging property.
Low Gain Over Years
It is a fact that appreciation in the property price over the years offer you a good return, but this gain is comparatively low than profit from stocks. In other words, a volatile stock market can provide you with a higher profit than real estate investment, while you can’t expect a jackpot while investing in a property.
Poor Liquidity
Buying a property is quite a simple and straightforward task than selling it in the market. Properties are not a liquid investment. If you are in luck, you can get a reasonable sale price right away. However, in typical cases, you might have to wait for a year or more for locking into a profitable deal.
High Cash Requirement
If you are interested in real estate investment, you must have the right amount of cash in hand and savings. Some people opt for a mortgage option, but it works only when you stick to a monthly payment schedule. Otherwise, you will go bankrupt.
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