Four reasons to invest in real estate     image

Four reasons to invest in real estate  

29-12-2022

For many beginning and advanced investors, it is no longer attractive to invest their money by putting it in the bank. This is due to the low interest rate set, which does not yield much compared to other options.     

So, there is a need for multiple, similar investment alternatives that are just as safe. Investing in real estate (investing in indirect and indirect real estate) is a good choice for this. We give four reasons why this is so.  

1: Investing in real estate provides an additional income stream    
According to many analysts, investing in real estate is a profitable choice in the short and long term. Compared to other options (such as investing money in stocks or savings), (direct) real estate as an investment provides a good return. This is because there are two types of returns from the investment: monthly rental income and capital gains from the property. You can supplement your current income or reinvest these forms of income. So, if you invest in the right properties, you will have an additional, positive income stream every month.   

2: Real estate as an investment is less sensitive to inflation    
Good to know real estate is less sensitive to inflation. When prices rise, rents and your property value also grow with them, maintaining their value.  So real estate as an investment is also an excellent opportunity to "protect" your equity from high inflation. This tactic is also known as an inflation hedge. However, it is important here that you as an investor think carefully about what type of real estate is best to invest in.     

3: Investing in real estate provides a wider spread of risk     
As an investor, it is necessary to spread your risk as much as possible in order to achieve higher returns. After all, no investor wants to put all his eggs in one basket. Investing in real estate can therefore ensure that your wealth is better to spread out, making it better protected against a stock market downturn.     

4: Investing in real estate is easier than investing in stocks    
Investing in stocks requires much more thinking compared to investing in real estate. This is because stock prices are much more volatile as they fluctuate daily. This causes you to invest not only money but also a lot of your own time. For example, as an investor, you must perform many analyses and check the numbers regularly to make good choices.   

When investing in direct and indirect real estate, there are relatively fewer things you must pay attention to. When investing in direct real estate, you generate a constant income stream through rental income, which requires little effort. In addition, when investing in indirect real estate, the manager of a real estate fund performs strategic and analytical tasks. Thus, as an investor, you spend less time and do make more money. 

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