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Why Investing in Real Estate is the Key to Securing your Investment and Obtaining Financial Safety

The best financial safety net should provide consistent, long-term financial aid. Savings accounts only provide people with whatever they deposit into their accounts. Conversely, real estate investments can become long-term sources of consistent yields in the future. Whether you pay full price for a property or buy a foreclosed property at a discount rate – one savvy real estate investment can become a significant safety net in the future.

According to a recent study, the average real estate investment yields 8% to 12% returns every year.

Of course, net higher gains are earned by serious investors who use their expertise to receive higher returns. But, just a median yield of 10% per year means that a million-dollar real estate portfolio can generate $100,000 in passive income every year. Here are some other reasons why investing in real estate is the best way to secure your investment and obtain financial safety –

Real Estate Investments are Tax-Deductible

In this era of inflation, tax write-offs are possibly the most logical reason to invest in real estate. Investors can deduct the depreciation of their properties to reduce their tax burdens. Meanwhile, the actual value of their property appreciates. Invest in real estate and send the money saved on taxes to a savings account. Keep building your financial safety net by earning considerable tax write-offs every year!

Real Estate Investments Can be Inherited

Unlike most financial instruments (bonds, stocks, etc.), real estate investments always appreciate in value in the long run. Your investment properties of today will serve as major financial safety nets for your successors (children, relatives, etc.) in the future. Real estate investments can be inherited without any major inheritance taxes or legal hassles.

Property Management Services Making Investors’ Lives Easier

Many people refrain from owning real estate because they don’t want to be landlords. Renting out your property is never easy – unless you hire third-party property management experts to help you out. These companies oversee all tenant-related tasks. A reputable local property management company can –

  • Screen tenants
  • Process rental applications
  • Perform maintenance and repairs
  • Handle tenant complaints
  • Collect rent
  • Conduct evictions
  • Perform regular property inspections

Thanks to these companies, converting real estate investments into healthy, passive sources of income has never been easier. Savvy real estate investors use whatever money they earn from rental payments to build emergency funds. Just by owning one piece of property, you too can start this journey and consistently grow your financial safety fund.

Address Future Financial Risks

Many regions of the world are currently experiencing historically low unemployment rates. That’s due to the COVID19 pandemic and the subsequent job losses. A select share of all the people who’ve lost their jobs in the past two years is real estate investors. For them, the income generated from their real estate investments has taken the place of their monthly salaries.

Of course, financial difficulties are guaranteed when anyone unexpectedly loses their job. But, the COVID19 pandemic has proved that people don’t know what the future holds for them in their professional fields. Entire states can experience severe, long-term economic pressures as well. In such crisis situations, even small yearly yields can help real estate investors financially support themselves.

A Place to Live

Owning just one property gives people the assurance they need during financial crises. Unlike other types of investments, investing in real estate actually comes with a direct, real-life benefit – you get to own an actual home! Of course, real estate investors in such dire financial situations need to wait for their tenants to move out. However, they always have somewhere to go during emergencies.

According to a report, 35% of modern-day investors prefer to invest in real estate over gold (28%), fixed deposits (22%), and stocks (16%). The intrinsic value of owning actual properties makes real estate investments highly appealing to modern-day investors. From time immemorial, property ownership has been the key to obtaining financial safety. In this current era, nothing has changed in that aspect.

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