Why Invest In Real Estate

When investing money, most of us want those hard-earned dollars to be working hard for you, ultimately growing as time passes. However, there are so many ways to invest money why you would consider investing in real estate?

You can invest in:

  • Stocks
  • Mutual funds
  • RRSPs
  • Real estate
  • Other types of investment

Some options may give a high return on investment (ROI) over a short period, but can be too risky. Some may be reliable, but the return may be low.

Can you have both, a good performance and low risk?

Real estate investments gives the balance we want. That is a safe type of investment, and return on your money is always expected to be positive. It is common to have doubts about any investment, and if you still not sure about investing in real estate consider the following:

Seven reasons why should you invest in real estate.

  1. Somebody pay for your mortgage

    Your tenants pay rent every month, covering both mortgage and expenses. Even if the investment property does not appreciate in value, tenants will have paid off mortgage debt in 25 years! When it comes time to sell, the cost of the purchase will be equal to the original down payment.

  2. Appreciation in value

    Rental properties appreciate in value over time, and over the last 60 years, home prices in Canada have appreciated an average of five percent per annum. When buying an investment property in the right location, there is money to be made off of appreciation alone.

  3. Leverage

    Buyers only need a 20 percent down payment to invest in an investment property. A financial institution will provide the outstanding funds (a mortgage). However, property appreciates in value based on full purchase price, not just downpayment amount.

  4. Rental income

    This is a portion of the rent paid by a tenant that an owner would put back in their pocket. When buying a property to rent, an investor’s goal should always be to have positive cash flow. The rent collected should cover all expenses as well as overflow, which the investor would hopefully keep. This extra amount should grow each year when you increase rent according to inflation.

  5. Inflation-proof investment

    Each year, rent costs will increase for tenants according to the inflation rate, but mortgage payments remain the same throughout the duration of the term. An investor’s income will grow, and expenses will stay the same.

  6. Wealthy retirement

    When buying an investment property, remember that in 25-30 years, it will be mortgage free. Income from that property will be back in the hands of the investor. Saving for retirement can be difficult, but investing in real estate is a risk-free way to have a steady income when you choose to retire.

  7. Legacy

    An investment property may pay for children’s education, while also providing them with additional income.

Most of us will never get rich overnight. Usually, it takes a lot of time and planning for such dreams to become a reality. Investing in real estate is a slow but guaranteed way of securing long-lasting income. Hope now it is clear why you should invest in real estate. Do not wait and start grow your portfolio as soon as possible.