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Updated by Joanna James on Mar 30, 2021
Headline for Reasons Why Real Estate Is a Good Investment – Remarkable Benefits for the Investor
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Joanna James Joanna James
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Reasons Why Real Estate Is a Good Investment – Remarkable Benefits for the Investor

There is no doubt that investing in real estate will be an attractive option for those wishing to make a solid investment. Provided below are some reasons why real estate offers note-worthy rewards.

1

Real estate offers superior returns

It may be said that real estate offers superior returns with less volatility when compared with the stock market. Generally, when it comes to real estate, the risk of making a loss will be minimised because the property will be held for some time. As the market recovers after a dip, so will the property value and equity will be built. On the other hand, in the stock market, risk will be constant and there will be many uncontrollable factors that could negatively affect your investment. Additionally, real estate provides more control over the investment as the property will be a tangible asset that can be leveraged to obtain several streams of revenue, whilst also experiencing appreciation of capital.

2

Real estate features a strong tangible asset value

fter investing in real estate, the property and land will always have value. Other kinds of investments may lose value leaving you with negligible tangible asset value; for example, a stock may dip to a zero level and the value of a new car will depreciate over time. This hardly happens with properties especially those in prime locations. However, to protect yourself from a worst-case scenario, take the opportunity to avail yourself of a homeowners' insurance policy to safeguard your real estate investment.

3

The value of real estate will constantly increase

Generally, the longer that you keep your acquisition in real estate, the greater the amount of money that you make. The housing market always recovers from minor slips in home appreciation, with investors who kept their real estate acquisitions benefiting after conditions return to normal with appreciation back on course. Recently, investors in real estate in the high performing markets have experienced great success, with lucrative positive appreciation taking place.

4

Real estate investment will diversify portfolios

Financial planners will inform you that when it comes to investment, diversification will be very important. When your portfolio is diversified, the risk will be spread out. Real estate would be a secure tangible asset that will serve to mitigate risks elsewhere in your portfolio. On the other hand, many have acquired substantial wealth solely through real estate investments. When it comes to investing in real estate for diversifying your portfolio, a trusted developer like Prime Residencies is worth considering as it offers well-located apartments for sale in Colombo.

5

Real estate investment may bring tax benefits

In some countries, after investing in real estate, it will be possible to gain tax deductions; this can be on cash flow derived from an investment property, mortgage interest, operating costs and expenses, insurance, property taxes, depreciation and so on. In fact, the final part of the year happens to be a busy period for those in the real estate sector as many people desire to make the most of the various tax benefits on offer.