Making the decision to start investing as a part of a healthy financial plan can be an intimidating choice. From stocks to businesses, real estate to rental income, there are a lot of investment options to consider.
While investing in stocks is the more popular route and a common way to see fast returns, it’s actually a pretty risky move. Investing in real estate might take longer to pay out but you’ll be more likely to see a return, even if it takes a bit of time to get there.
There are many reasons why real estate investing is a great option to grow your portfolio, especially for someone new to the investing scene.
Real estate investing has many positives
Real estate returns are tangible
When investing in real estate it can be easy to feel good about your investment because there is actually something there that you can see, feel and use. While stocks might increase the number in your dividends account, real estate actually provides a tangible return on your initial investment, even if the market seems to be holding steady or even dropping.
Real estate will always be in demand
Homes and property are always going to be purchases that people want to and need to make. People will always need somewhere to live and purchasing a home is always on the list of things to do in life. Whether you are buying your property to live in and use as a long-term investment or to just to flip after a short time, there will always be a market available to you when it comes time to cash in on your investment.
Property will appreciate
One of the biggest positives in real estate investing is that the property itself will appreciate over time. As the demand for housing increases, particularly in in demand areas like Burlington, Oakville and the GTA, the value of the property is going to naturally increase as well. Even during times of a slower housing market, housing property tends to increase in value.
It can be passed down generations
One of the great things about real estate is that it can be passed down through your family or left to someone in your will. This transfers the investment benefit to them to consider the appreciation value over time.
Real estate can give a quick turnaround
One of the quickest ways to see a turnaround in your investment is to buy a property with the intent of flipping it. Whether you opt to buy a preconstruction condo for a great price and resell as the demand increases or buy an older unit and put some repairs in to increase the value of the unit, flipping a property can provide a quicker turnaround in your investment than the standard practice of buying to live in it.
Stocks can be volatile, real estate investing has proven stable
While property investment is a fairly stable investment move, stocks typically aren’t. Though stocks can offer a fairly quick return if you’ve chosen well, they can also go the opposite direction just as quickly. The value of stocks can turn on a dime and are dependant on many factors completely outside of your control. Your options for liquidating your stock are just to hold onto it or to sell it.
On the other hand, real estate investments are slower to appreciate or depreciate and you can more easily predict the shift. This allows you to choose one of many options to help make the most of your investment. Whether you hold, sell, improve the property to increase value, purchase adjoining property, or rent it out to earn an income along the way, the options are endless and the ability to work with the market to maximize your return means it’s a more stable investment option.
Real Estate is a great choice
When considering expanding your investment portfolio, real estate offers a stable and long-term investment strategy. With low interest rates holding steady and some great tax benefits to owning an investment property, choosing real estate can be a great choice for your portfolio.