The real question is - “Should you invest in real estate?”

Does one need to be a particular type of person, with peculiar traits or have a particular financial status, to invest and become successful in real estate investments? Well, the answer is NO! Investing in real estate is not only for the wealthy but for anyone with adequate research and knowledge.

Coming back to the question, “Why should we invest in real estate?”

Here are a few benefits of investing in real estate.

1. Firstly, and most importantly, it is one of the safest investments out there. As it is secured by the asset itself viz. the property. You will rarely see your investment lose its value and if it does happen, it will only be for a short period of time. Usually, it only performs better with time. Additionally, you’ll even find it easy to get financing if you have decent credit and your debts are under control.

2. Secondly, you can be eligible for tax deductions and receive benefits for the same. When you purchase and hold real estate, and then rent it out, you basically own a business. If you incur any expenses to maintain the property, handle or even conduct any business - it can be written off of your taxes, resulting in reduced tax liability and, increase in profits. Other breaks you can expect and expenses you can write off include - Travel costs associated with your investment, repairs and maintenance, depreciation deductions, legal and management services, mortgage interest and origination points paid on loans, homeowner’s insurance, HOA dues. But, before assuming you can write expenses off, do have a word with your tax advisor.

3. Thirdly, real estate values usually tend to appreciate. At times, you can also force appreciation. On average, real estate appreciates on its own by 3 - 5% a year, keeping aside the maintenance. What you can do to increase the appreciation is make renovations or repairs. But to actually increase the property’s value, you need to work with a licensed appraiser or a real estate agent to know “the most valuable” renovations that need to be made. Some renovations can even pay you back as much as 80-90% of the money invested. You won’t even require major renovations. Even something as small as a bathroom fix-up can drastically shoot up your property’s value.

4. Another exceptional benefit is that real estate assures a steady cash flow. All you have to do is purchase and hold real estate and then rent it out. You won’t be relying only on appreciation. Instead, you will be receiving a monthly payout in the form of rent.

5. Finally, real estate is an excellent retirement savings plan. Real estate is not liquid, you invest in it for long term benefits. With each passing day, you earn more equity in the home. So, when you near your retirement age, you can sell the property and get through your retirement being financially secure. Another feature of real estate is that it is a tangible asset. You can leave behind your legacy by passing it down to your heirs and future generations.

So, ending with just a word of advice. As we have now established that real estate investments are one of the best-performing assets there is, and it yields the highest returns too, you’ve just got to do it right and be wise. And in no time, you could be sipping margaritas and enjoying the most beautiful vacation post-retirement!