Buying an investment property can be an overwhelming decision, but this real estate investing for dummies article can help! Investing is a choice many people make at one point or another, in the hope of bringing wealth to their lives.
While there are many investment alternatives such as stocks, bonds and cash, property investment tends to be viewed as one of the safest and easiest options.
However, property investment isn’t for everyone. Therefore, if you are considering investing in property, it is important to weigh up the pros and cons.
The Pros of Real Estate Investing for Dummies:
- Capital Growth: The value of your property will grow over time and may be extremely beneficial financially if well chosen. Not only will you benefit from steady capital growth, but regular monthly rental returns if you purchase a rental property.
- A Safe Investment: This is the only investment market which is not dominated by investors, hence creating a natural buffer in the market. It is also the most forgiving investment; if you purchase the worst property in the area, chances are that its value will still increase over time with good portfolio management.
- Mitigate Risk: You can insure your asset against most risks like fire, vandalism and natural disaster.
- Anyone Can Invest: You do not have to possess a vast amount of knowledge, as you may with stocks or bonds.
- Control: Unlike other investments, with equity real estate you are in full control of your property investment; you can make all the decisions and have control over all of your returns
- Tax Benefits:Although tax benefits should not be used as a decision-making factor, it can be a benefit of investing in property. If your property is negatively geared, it may provide tax benefits.
The Cons’ of Real Estate Investing for Dummies:
- Liquidity: Although you can sell your property if things get tough, the process is not as quick as it is to sell other investments such as shares
- Hidden and Ongoing Costs: Along with the initial costs of investing in, you will need to consider the ongoing hidden costs of property investment such as maintenance and repairs, insurance and taxes when deciding how to invest in real estate. Other investments such as shares do not incur ongoing fees.
As you can see the pros of real estate investing for dummies for outweigh the cons. Investing in real property can be a great way to grow your wealth. To learn more about real estate investing for dummies, contact a member of the Asset Quest team at (239) 541-8448.