Why Invest in the Real Estate Sector

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December 6, 2018 Investment Decision

Investing in real estate can be a standalone investment or a part of an investment portfolio. Either way real estate investment provides you with a smart and secure financial future. Whether you are looking to diversify your existing portfolio or start your newfound passion for real estate investment, there are a number of benefits associated with real estate investment. Here are six reasons to invest in real estate:

1.Diversification – Real estate investment can be a great way to diversify your portfolio. Diversifying your portfolio means you disperse the risk of one investment going sour.  You might have several other investments in different industries to which you can add the real estate sector too. The lesser the correlation between your investment industries, the greater is the advantage of adding it to your investment portfolio.

2.Stability – Investing in real estate is a sound financial decision. Because the real estate market is the most stable, it does not fluctuate or crash like stock market. So you can sleep peacefully knowing that you have made a smart decision by investing in real estate, without any worries of going bankrupt all of a sudden.

3.Accessibilty – Unlike in other investments, the real estate is a local industry, so you can gain pertinent knowledge more easily. This way, you will be aware of current market prices and trends, brand value of reputed real estate companies, location etc, and this will aid you in making smart investment decision without having any future regrets.

4.High cashflow – With real estate investment, you can enjoy a steady stream of cashflow. For instance, by investing in rental properties or commercial real estate, you can earn quite a lump sum of money every month, so your cashflow is never on cessation due to unfavorable market conditions. Moreover, when you have bought a property on loan, you also get to enjoy tax free cash flow.

5.Leverage –  When you invest in real estate, you can utilize leverage greatly to your advantage. For instance, you can avail bank loans to purchase your investment property and enjoy higher leverage, by making more money from rental properties or property appreciation. In a market where rents and property value appreciate, while your monthly mortgage remains fixed, you can earn greater profits.

6.Ownership pride – Apart from all the financial bonuses in real estate investment, owning a property also is a symbol of status and pride. It is definitely more impactful to say you own a flat at Banani or Bashundhara than saying you own a certain number of shares in a particular company.

Real estate investment could be the road to your financial success if you are a prudent investor. Real estate represents a distinct asset sector that is relatively easy to understand. It can be a lucrative investment sector, either on its own or as a part of portfolio, through reducing risk, and enhancing return on investment.  So put on your thinking cap and invest smartly.