Be it Housing, Retail, Hospitality, or Commercial – Real estate is everywhere. This sector has amassed global recognition and its growth has become key to any country’s economy and is a focus of every financial budget. That is what makes the Real estate sector so close to the heart.
Investment can transform into a lucrative action when it is done wisely. Real Estate investing is one of the best options for you if you are looking to make a return profit on your investment. Moreover, unlike other assets like gold which is prone to frequent change in value, the change in real estate values is gradual. In this column noted and celebrated Astro Strategist cum Business Astrologer Hirav Shah discusses the unchallenged benefits of real estate investment.
1. Cash Flow
One of the greatest advantages of investing in real estate is that it can generate steady cash flow through rentals. It can cover your mortgages and tax expenses. Moreover, the flow is most likely to strengthen over time after your mortgages have been paid.
2. Tax Advantages
Real estate investors enjoy numerous tax advantages like breakups and deductions which ultimately reduces their taxable income. You can take advantage of a long period of tax reduction because you keep improving on your real estate investment throughout its useful life. Usually, you can deduct costs for acquiring and managing a property.
Real estate investors usually generate income from rentals, profits from property-dependant businesses, and appreciations. The value of a good property in the market is bound to increase over time. Investors can make a profit by selling the property when its value rises. Moreover, rental rates are subjected to elevation and are another way of ensuring profitable returns.
Equity is the difference between the market value of a property and the amount you pay for the mortgage. Paying down your mortgage and building equity will give you leverage to invest in more properties. Investing in more properties will further increase your cash flow.
5. Diversification Potential
Real estate was no correlation whatsoever with other assets that you invest in. Furthermore, investing in real estate will diversify the portfolio of assets that you possess. This will reduce the volatility of the portfolio and will ensure higher returns with lesser risk.
When you use borrowed capital or mortgages on an existing property in order to acquire another one, it serves as leverage. Leverage increases a property’s potential return value. Moreover, since real estate is tangible and can act as collateral, financing is easily available for it.
7. Risk-adjusted Returns
The fact that real estate provides competitive risk-adjusted returns, serves as one of the greatest advantages of investing in real estate. These returns may vary depending on the location of the property, its asset class, and how the property is managed. However, most investors aim at beating the average returns in the real estate market.
8. Inflation Hedging
Real estate’s capability of hedging inflation acts as a huge advantage of investing in it. The link between GDP growth and the demand for the property determines its inflation hedging capability. The demand created for properties increases the rental rates which in turn elevates capital values. Therefore, some inflationary pressure is weathered by rents and capital appreciation.
9. Real Estate Investment Trusts
Another benefit of real estate investment is the existence of real estate trust. If you find yourself unprepared for possessing and managing a property yourself, you can rely on real estate investment trusts. It allows the buying and selling of publicly traded properties on high stock exchanges. You can get in and out of these positions quickly if you trade in high volume.
Hirav Shah, who has an astounding Global presence with his clients based across various business sectors and is the top influencer and advisor in the fields of Real Estate, Sports, Entertainment, Hollywood, Bollywood, Tourism, Hospitality, Corporate Business, Politics & more, wraps it up by saying that investment in real estate may seem intimidating if you are unaware of the advantages that follow it. While you look ahead to buy your next real estate property, think of investment goals more than just buying. People are more interested in looking for a modern lifestyle but want to stay connected to roots. Thus, many residencies in India are now built according to buyers’ choices, and they can’t delay finding their dream house. Real estate properties are safe for you and your family. And always remember to take the assistance of astrology while buying a new property.