Joanna James
Looking to make an investment, be it small or large scale, which offers both financial rewards and relative security in times to come? Here are some reasons why investing in real estate is well worth considering as you plan for the future.
Investing in real estate is a great way to earn passive income; this is the term given to when an investment brings income that does not require any or only a little effort to maintain. Prudent investments on real estate can be a long term source of passive income (such as rent income) which one can accumulate while balancing other full-time or part-time responsibilities; you don't even have to be in the same country to enjoy such benefits as the income is generated, usually every month.
Linked with the passive income is the cash flow which is the net income after elements such as operating costs and payments in the mortgage have been deducted. This cash flow will generally increase over time and help to build up one's equity. Because real estate assets are most often secured on a long term basis, you can expect an extended cash flow period which can generate more income than yields from the stock dividend. Added to this, is that there is an appreciation in the value of assets over time; this includes everything from the increase in land values to the rise in rent charges.
A hard or physical asset is what is meant here and which covers aspects such as land or property which have meaningful value. As mentioned earlier, such real estate assets generally appreciate over time increasing their value; additionally, it generates income (such as through rent) which further adds to its income-generating potential. Of course, such investments do not only have to be on a large scale basis. For example, in Colombo, city apartments including those at the up and coming TRI-ZEN apartment complex are available for both local and foreign individuals to invest in and come with freehold ownership too.
Leverage is the term given to when you make use of borrowed capital to increase an investment's earning potential. Because real estate is a hard or tangible asset, financing is easier to come by and offers you greater opportunities to enjoy increased returns in the future. This collateral will help the investment and your future earnings too; for example, with the income generated through rent, you can pay down the mortgage as well as cover other expenses incurred monthly.
Those investing in real estate also have the option of diversifying their investment portfolio which in turn offers increased stability. In essence, this means that one can invest in a number of assets of which, real estate can be one. This diversified portfolio not only secures income from several sources but also greatly reduces the investment risk. Real estate investments will generally bring steadier returns even during economic fluctuation and reduce the risk of volatile high-risk assets.
A true believer that the pen is a mighty weapon, ventures into reaching the minds of every reader with the earnest hope of leaving an indelible stream of thought.
A travel writer who has a passion for fashion and a deep interest in admiring new and exotic attractions around the world.
