8 Reasons Why Real Estate Is A Superior Investment To Stocks

When it comes to investing, real estate is one of the popular and recommended assets to store cash in. However, oftentimes, real estate investment is pitched against other investment types, stocks, mutual funds, and bonds. For newbie investors such comparisons bring on headache and confusion. This article aims to settle the debate with 8 reasons why real estate is a superior investment, AKA why you should invest in real estate. Read on.

8 REASONS WHY YOU SHOULD INVEST IN REAL ESTATE

Measurable cash flow — One of the primary reasons people invest is to create another stream of income. If this describes you, then investing in real estate is an excellent choice because it generates predictable cash flow. Rent from real estate investments can provide investors with reliable cash flow on a month-to-month basis.

The value of real estate can be improved — This is one of the most attractive advantages of real estate because only a few assets can be modified to enhance market value. Considering the fact that real estate is a tangible asset made of wood, stone, glass, and metal, it can be modified, in other words, renovated to suit the present demands of consumers.

Real estate increases in value — For centuries, real estate has proven that it is not a bubble asset. You won’t lose your gains, and capital in one fell swoop. According to the National Association of realtors, the cost of real estate has climbed by 6 percent every year since 1968.

Real estate can be leveraged — Arguably, the biggest advantage to real estate investing is LEVERAGE. In real estate transactions, you can use leverage to reduce the amount of money you need to acquire a property without losing your potential ROI to debt financing.

Secure — In the words of Russell Sage, real estate is the most solid asset ever developed by human ingenuity. It is arguably the only indestructible and imperishable asset that increases in value over time.

Tax Deductible — Tax laws give property owners tax relief. For example, the federal tax code allows multiple deductions for specific expenses incurred in owning property.

Depreciable — Another attractive advantage of real estate is that it is depreciable. The federal tax code permits the depreciation of the value of investment property overtime.

Excellent retirement asset — Asset managers consider real estate to be an excellent retirement asset. At the initial stage of ownership, the cash flow is lower but after paying mortgage, the income flow improves.

Summary

Considering the points above, it is clear that investing in real estate is a practical choice. Now rather than asking why should I invest in real estate, you should ask what is the best real estate property to purchase.

We recommend multifamily properties because they bring excellent returns with low volatility and many other financial advantages.