The Financial Perks of Investing in Real Estate
Are you interested in building long-term wealth? Are you looking for ways to make money in your sleep? If you answered yes to either or both of those questions, you might want to consider investing in real estate. There are many factors that make real estate a wise investment, but to keep it simple, we’ve narrowed the list down to four perks that are sure to get you excited about buying your first home or investment property!
#1 Real estate allows you to generate passive income.
Passive income is any income made without any active or ongoing participation. When you invest in property, most of the “work” is done upfront. Once the transaction is finalized, you can earn money every time the property goes up in value or is rented to a tenant.
Some would argue that renting a property to a tenant is not 100% passive due to the maintenance and responsibility that comes along with being a landlord. Looking to make money without the headache of tracking down payments from renters and addressing emergency repairs? Hire a property manager! In fact, we know a pretty great one. For more information, contact our sister company, Blakemore Property Management.
#2 Real estate appreciates.
Unlike a new car that goes down in value the second you drive it off the lot, property tends to only go up in value, making it a great long-term investment.
So, you may be wondering, ‘What makes real estate appreciate?’ To answer that question, here’s a list of four appreciation driving factors:
Supply and Demand. The more available property, the lower the value. The less available property, the higher the value. Because there is not an infinite amount of land and property in your market, your property is likely to go up in value over time.
Cost of Borrowing. As home loan interest rates fluctuate, so does the demand for homes. When home loan interest rates decrease, home affordability increases making real estate more accessible
Property Market Drivers. This refers to all developments in a specific area that add to the desirability and convenience of living there.
Population Growth. This is a simple concept — more people = higher demand.
#3 Real estate is a low-risk investment.
Real estate is considered a low-risk investment because of the large number of options an owner has to manage, fix, and maintain their property. Sure, there are factors that can negatively affect the investment such as: drastic market changes, natural disasters, and costly repairs. But a large majority of the time, property owners will not experience devastating loss. This is why more often than not, homeowners are able to hold onto their properties for long periods of time without fear of losing every penny they put into the investment.
#4 Real estate has a high tangible asset value.
When an investment has high tangible asset value, it means that unlike stocks, bonds, and hedge funds, its value can be protected. There will always be value in your land and in your home—and a plethora of ways to maintain its value at that! Not only does a home add monetary value to your life, but it enhances your life as well. It’s a space where you can host others, gather with loved ones, start a garden, and so much more! Your stocks and bonds are important too, but they can’t do all of that.
WHY WE INVEST
Here at Blakemore, we have our own reasons for investing in real estate...
“It’s my retirement plan. Being self-employed, I don’t have an employer 401K and the income generated from my rental properties goes into buying more rental properties and sustaining my gardening dreams when and if I retire.”
“Because I have a goal to have abundant passive income and to leave homes to my children. Plus, I love being able to provide homes for people who aren’t able to buy homes yet.”
“Because when I die, I want my children to live a better life than I did and I want to provide affordable housing to my community.”
