1. Real Estate Enables Portfolio Diversification

You might have invested your income into stocks, shares, mutual funds, etc. But when the stock market crashes, you can suffer a significant loss for the time being. That’s the reason you should diversify your investments. You might have heard the quote, “Never put all your eggs in one basket.” So, real estate investments can be an excellent way to diversify your investment portfolio.

2. Real Estate - a Tangible Asset

The price value of land possession may get high or low within the span of the years but tangible assets are worth something. When you invest in real estate, you possess a tangible asset. You still have a piece of a physical property to sell. Unlike the stock market, the value can never be zero or negative value.

3. It Provides a Steady Cash Flow

The biggest advantage of investing in real estate is cash flow and you can enjoy passive income. Through rent or lease, you can easily generate a steady cash flow. This provides financial security and regular cash flow which is rare with other investment options. Hence, real estate is a great way to build consistent cash flow in the long run.

4. It Grants Appreciation

Real estate markets are low in volatility and generally high in returns. While there can be lows but over the years, the value of real estate appreciates. A report by Statista mentions that the growth rate of the real estate industry across India was estimated to be 11.2 percent from the fiscal year 2015 to 2020. The best part about real estate is that you can appreciate the value of land by improving its interiors, look and feel, as well as by adding amenities.

5. Tax Deductions Redeems

When you buy and hold real estate, the IRS allows you to take advantage of tax deductions. Any expenses that you incur for maintenance, or handling business like buying a laptop, traveling to the property, etc. can result in tax deductions. Thus, you can reduce your tax liability and increases your profits.

6. Real Estate Hedges from Inflation

Another added benefit of real estate gains from inflation. As the national economy grows, the demand for real estate drives higher rents and selling prices. In return, you can achieve higher capital values.

7. Serves as a Retirement Savings Plan

Real Estate investments are a long-term game. As time passes, you earn more equity in the home. As you approach your retirement, you can sell the property and the profits will help you survive the life ahead. Real estate can also save you from financial breakdowns as you can sell the property whenever and get the capital in a lump sum or in parts.

On An Ending Note

Real estate investments are always going to stay in the financial security pyramid and it is a great way to build wealth. But if you don’t have the initial capital to buy land/property, you can own a fraction of it in partnership. MyProp is a platform democratizing real estate investments in Vadodara that allows you to own land in partnership. Get in touch with MyProp to know more.