18 Reasons Why You Should Invest in Real Estate Properties
There are people who invested in real estate properties in the past and made millions of dollars, pounds, or other currencies; in fact, they made so much money that they could literally have stopped working if they wanted to and consistently relaxed on any beautiful beach, or in any part of the world. If you have an opportunity to meet such people today, you would come to realize some obvious reasons why you should invest in real estate properties.
Are you willing to acquire knowledge, create time, commit yourself, and take action by performing major real estate duties in order to achieve big goals when investing in rental properties? Are you willing to take some necessary steps to achieve success in real estate investing? Are you willing to invest your time or money—whether borrowed or not borrowed—to realize your real estate dreams? If your answer to these questions is “yes”, then you can get there and surpass many people who have reached there before.
It’s possible for you to achieve even more than the greatest ones have; however, if you are looking for a fast and easy path to riches, then investing in real estate properties might not be the best path for you. On the other hand, if you are willing to do what is necessary to find success, even if it requires passing through a difficult pathway, then you would appreciate the content of this article which discusses the following 18 reasons why you should invest in real estate properties:
1. Countless people have made a living from real estate properties
It’s much easier to have faith to achieve something if there is evidence that countless people have achieved it before and continue to achieve it today. From the distant past, not-too-distant past, and presently, there is proof that landlords have built and continue to build wealth by owning and renting land and properties.
Because countless people have succeeded before and are succeeding today, you can also take some important steps to achieve success by investing in real estate properties. Andrew Carnegie once said: “Ninety-nine percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests their (sic) money in real estate”.
2. Dealing in real estate properties is a simple and straightforward process
Although an appreciable amount of time and effort would be required to succeed when you invest in real estate properties, all things being equal, the processes and activities involved are simple and straightforward. The schemes or strategies for success won’t be difficult to learn, practice, and master if you’re really interested and dedicated enough. Along your real estate investing journey, every skill you acquire will become second nature if you’re truly interested in investing in real estate properties.
3. Investing in real estate properties requires little or no money for start-up
Because people are always looking for properties to live in, there will always be countless opportunities to invest either your money or time and start making money by getting involved in real estate property deals. Contrary to the belief held by certain people, you don’t need millions to invest in real estate properties.
You can start with no money by working as an agent and getting commissions when you connect clients to properties; in so doing, you can make consistent amounts of cash from each deal. On the other hand, you can invest with your own money, but this depends on the amount of money you have in your pocket.
Even if you don’t have any money, you can take a loan or borrow money from banks, private lenders, etc., and invest in real estate properties. Loans are easier to get if your proposals can convince lenders that you would be able to invest in real estate properties and make money for both yourself and the lender.
4. The real estate property market is reasonably predictable and stable
If you take time and pay close attention to the real estate market and its defining characteristics, you could be able to predict when it would be fair to make investments for long-term gains; also, you would be able to predict quite fairly when it wouldn’t be so necessary to make investments for short-term gains that could make you lose your investments like some investors unfortunately did when the real estate market crashed in 2007.
Although the real estate market crashed in 2007, it was stable enough at the time for investors who had invested for long-term gains; they didn’t lose as much as those who were impatient and tried to be too greedy by focussing on short-term gains. Generally, real estate markets are predictable and stable for those who are attentive and have a long-term perspective.
5. Real estate properties can be managed directly
Because real estate properties can be managed or controlled directly, you can be your own boss and have direct control over the future and outcome of any deals you could be involved in. When you’re in full control, it would be up to you to decide whether or not properties should be in good or better shape and have the best possible outlook before you sell or rent them: you wouldn’t have to depend or wait on anyone else to determine the shape and outlook which would automatically determine the amount of money you could make from properties.
6. Investing in real estate properties makes it possible to create wealth without owning or managing any properties
It’s possible for you to make money by investing in real estate properties without owning and managing any properties; you can do so by getting involved in real estate investment trusts (REITs) and buying and selling publicly-traded REITs on major stock exchanges which usually trade under high volumes. One great advantage of REITs is that they pay 90% of income to investors and generally offer higher dividends than many other stocks.
7. Real estate properties always provide “multiple opportunities” which you could use to maximize value and profit
In comparison with other “non-real estate” businesses and real estate niches and schemes/strategies, if you invest in real estate properties, you would have opportunities to make profits through four major sources: cash flow, appreciation, tax benefits, and loan paydown.
Cash flow is the profit your properties could make after you’ve made initial investments. Appreciation is the extra money your properties could make over time as a result of an increase in their value; property that is $200,000 today could be worth $400,000 in 2 years’ time.
Depending on the country, there are usually tax benefits for real estate investors who provide housing for citizens and enhance stability in an economy. Loan paydown is a process whereby returns from investments are used to “pay loans down” after making profits by obtaining loans and investing in properties.
8. The real estate market is ever-present because people are always looking for real estate properties to buy, sell, or rent
No matter what happens in the world—regardless of how and when things go right or wrong—you will find people who are always looking for real estate properties to live in: the demand for properties will never come to an end because people will continue searching for houses or properties to live in. As a result, the rental property market will always be alive; instead of ceasing, it would only continue to grow over time as the world’s population increases at a steady rate.
9. Real estate properties have the potential to help you acquire leverages that can be used to make returns that are higher than initial investments
Generally, the nature of real estate properties makes it possible for investors to acquire leverages and invest in large properties for an amount of money that is less or lesser than the amount they would need to acquire other types of investments such as stocks. You can use real estate properties to acquire leverages and amplify your gains if you succeed in making returns on investments that are higher than the initial investments.
Leverage is an investment scheme or strategy used in real estate investing to borrow money or capital in order to increase the potential return on investment: it can also be defined as the amount of debt a business uses to manage and finance its asset in order to make profits. Leverages are the proceeds from borrowed capital that has been invested—in this case, in real estate properties—in order to grow a business’ assets or initial investment, and make higher returns.
10. If you don’t amend real estate properties, they still have the potential to attract returns that are higher than initial investments
No matter the method you employ in investing in real estate properties—whether it’s by using your own money, or borrowed money from a bank or private lender—the properties you invest in have the potential to attract returns (ROIs) that are higher than the amount of money invested, even when you don’t make any amendments on the properties in order to make them look more attractive or marketable.
11. If you amend real estate properties, their flexibility provides opportunities to make returns that are much higher than initial investments
Real estate properties are flexible because they are capable of being altered, structurally or functionally; by amending them, you can increase your profits much more than usual. This simply implies that you can make magic happen by rehabilitating or altering the outlook or structure of a property in order to maximize your profits or make better deals that can even attract greater returns.
12. You can focus on one, a few, or various types or classes of real estate properties
If you invest in real estate properties, you won’t be restricted to focus on only one or a few types and classes of properties: because properties are of various types and classes, you have options to focus on a few or many varieties of properties: commercial properties, large apartment properties, small multi-family properties (duplexes, triplexes, and fourplexes or quads), single-family properties, small multifamily properties, large multifamily properties, mobile properties or homes, empty land and occupied land, etc.
Within each type of property, you can still find those that are either small or large, old or new, short or tall, bad (ugly) or good (beautiful), etc.; in fact, the possibilities are endless.
13. Real estate properties are always associated with secret/hidden but legal information which you can use to benefit your investment
In the real estate world, there is always secret, hidden, or “insider” information that you can use to make profit which can benefit your investments because you are in the right place and have access or “connections” at the right time.
If you are aware that the government plans to lease out commercial buildings or large apartment complexes in a new city, you can hop in much earlier and connect with deals—that are tied to the properties—before the information leaks out. If you are aware that an industry is vacating from an area, and you perceive that it would be bad for your business, you can get your business out of that area before the industry leaves and the remaining associated businesses start declining.
14. In many instances, you can purchase real estate properties below their market value
Since negotiations, and sometimes intense arguments, are normal in the real estate world, if you are an intelligent negotiator and know how to win people over, there are many instances you can use to get great deals and buy properties below their approximate or actual market value. You can actually buy properties for thousands of dollars less than their actual worth in the market.
15. Real estate properties provide opportunities for you to make money without always being present
Although real estate investing can time-demanding, you don’t always have to be present before deals go through: because real estate has the potential to help create connections that can be used to make contracts, and outsource deals and landlording processes, in many instances when you don’t have sufficient time on your hands, you can still be involved in deals and make money without being physically present.
16. Investing in real estate properties can enable you to help your economy provide more hedge against inflation
As populations continue to increase and the economies of many countries expand, the demand for real estate properties continues to increase and drive rents higher; this, in turn, attracts higher capital and enhances GDP growth in each country. Therefore, if you are a big and influential investor in your country, you could help provide more hedge against inflation and stabilize the economy by using capital appreciation to minimize some of the inflationary pressure on the economy.
17. Investing in real estate properties can help diversify your portfolio and stabilize your income during rough times
If you’ve invested a lot of money in many other opportunities besides real estate properties, one way you can reduce the risk of losing much or all your total income when unfortunate circumstances arise is by diversifying your portfolio; you can diversify a bit more by investing some of your total income in real estate properties and reduce the risk of losing all or substantial amounts of your total income when investments in other “non-real estate” opportunities fail to yield the financial returns you expect.
18. Investing in real estate properties could eventually inspire and help you afford the house of your dreams
Although you might not be able to afford your dream house at the moment, you can buy or invest in a more affordable house and use real estate investment schemes or strategies to build profit or equity from it; if you do so over a period of time, you could be able to build a net-worth that would provide you with enough money to buy your own dream house.