Why The Rich Are Investing in Real Estate
And 5 reasons why you should too
Studies from yesterday, today and probably tomorrow show that those who control property are the rich members of the society. Rich people invest in a lot of places like crypto and stocks, but mostly people like to invest in real state as it is more tangible, more manageable and it offers high tax deductions. Over the last two centuries, about 90% of the world’s millionares have been created by investing in real estate. So the question rises that why everyone is investing in real estate for building wealth.
Investment
Investment is generally an important factor, if anyone wants to generate a high income. One on the greatest investors of all time, Warren Buffett, said that
“ If you don’t find a way to make money while you sleep, you will work until you die”
This quote surely inspires thousands of people around the world, investment in anything makes you have a second income which likely increases day by day.If you don’t invest your money on something that generates money, you will likely spend it all on something you don’t really need. Below are the top 5 reasons why you should invest in real estate.
Easy to understand
Understanding how to invest in real estate is a lot easier than understanding how to invest in stock market, especially for beginners. It is also a bit more in control than the stock exchange. The success of stock depends upon company’s management and its corporate success, which is completely out of your control, while the real estate are in your control in a way that you could control your physical property and tenants and you could literally have the tenant pay for the mortgage and while you also earn extra cash, which in turn could help you retire maybe 5 or more years earlier. Another point is that, you could lose a lot of money easily on stock while on real estate, the value rarely goes down and probably increases.
Natural Appreciation
As the population is constantly increasing, they need more place to live and conduct businesses. which constantly increases the demand of your property. According to studies, it is proved that wherever you live in the world, the property rates go up by 3% every year due to increase in demand. So not only does real estate maintains its value in time, but it grows your value for you, due to constant increase in demand.
Forced Appreciation
In case you don’t know, there exists a whole house flipping market. People buy houses in poor condition then they replace the windows, install solar panels, fix the roof and put up a fresh coat of paint and BAM! The house price from $800k goes to $900k by just using $50k. So when the market isn’t helping and you need quick cash you could just improvise the house and increase its value.
Market’s Ups and downs
While normal people like you and me will stress as the house rates go up, but experienced Real estate investors love the ups and downs of the market, They absolutely love it when the prices go down so they can buy more for cheap.
Passive Income for life
So Imagine you own an apartment in Paris and you rent it out, Then you go live in a south Asian country which is WAY more cheaper and then you could probably live the rest of your life at home enjoying your days.
Real estate is the modern day version of an oil rig in your backyard working 24/7 to make money for you.
Conclusion
These are just few of the many benefits why you should be investing money in real estate the next time you have extra money. There are some other benefits such as tax benefits, easy liquidification, easily insurable and it can be easily trasferred to your kids. Thank you for reading this post.
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