If you want to make the best of your investment portfolio at the earliest, real estate is a safe space to put your bets on. However, before diving headstrong into investments, it is essential you know the benefits and risks associated with real estate investment.
After all, money well spent is money well invested.
We, the Vatika Group have narrowed down the most important pros and cons of real estate investment.
Leading with the pros:
1. Appreciating Estates: The rate of appreciation of the property overtakes any possible inflation. Of course, glitches are a part of the game, but the most profitable move is to purchase a property at a discount, increase its equity and then sell it at a higher margin of profit.
2. The Money Never Stops Flowing: When it comes to the real estate market, once you have sold a property at the best deal, there is non-stop ‘cash flow’ every month even after sealing the deal.
With this extra ‘cash flow’ you can go on a vacation or take it a step further in real estate investment.
3. Skilful Use of Leverage: If you are new to the concept of leverage, it simply means the utilization of borrowed capital to instantly accelerate ROIs on the property. The trick is to use a conventional loan to buy an investment property with a 20% down payment. Once you have built on the property, you can expect your ROIs to shoot up and steadily increase your profit margin.
While the pros of the industry paint a sure picture, keep one foot in the real world and check out the cons associated with real estate investment:
1. Time-Consuming: Unless you are ready to dedicate most working hours of the day to skillfully managing your existing rental properties, you may end up on the wrong side of the deal. There is a learning curve associated with real estate investment and only if you have ample time and dedication, can you master it.
2. Ongoing Money Investments: When it comes to real estate investment, you need money to make money. However, it is not just a one-time investment. Even after you have bought the desirable property, a steady cash outflow will be observed while you pay for property taxes, insurance, maintenance costs, and mortgage payments. Only if you have enough investment capital ready, should you step into this warzone.
3. Unfortunate Risks: After purchasing the perfect property for sale, your new property may be subject to some unfortunate risks. These may include liabilities due to uncalled-for accidents, buying the property at the wrong time, being fooled by a renter who is trying to backstab you, and the list goes on. With the high possibilities of these risks, you will be on the wrong side of the court.
Keeping the cons in mind, real estate investment can be counted as a long-term beneficial asset for your investment portfolio that will be successful in yielding you a high return on investments (ROIs).
Feel free to dig deeper into this and contact the Vatika Group to get ensured assistance on this matter.