Investments are usually touted as being smart decisions that could take your finances from bad to good, and from good to great. Once you’ve got money in the stock market, and you’ve got a good portfolio in front of you, you can watch as your savings account gets padded out as the years go on, with little input from you.
A lot of debate surrounds what the best investment you can make is. When you’ve got some cash to float, and you’re not sure how to double it, what kind of investment do you reach out for? Well, a lot of people recommend real estate.
A house is a great investment, for many reasons, but is it the best one you could ever make? Well, if it’s not your first house, and it’s not the place you rely on to put a roof over your head, there’s a good chance it is! So, let’s dig a little deeper into how a house works out so well for anyone who has the capital to invest in one – it could be one of the smartest financial decisions of your life!
It’s Low Risk
Risk is something we always have to take into account when deciding to make an investment. After all, nothing is ever guaranteed in life, and when you’ve got some disposable income to put to good use, you’ll have to come to terms with the fact that it really could go nowhere. However, when it comes to making a generally safe and low risk investment, putting your money into real estate is usually the best idea.
Of course, the more cash you float into the enterprise, the better the return you stand to gain. The same applies to the house you invest in – a small cottage that you spent less than a hundred thousand on may go for a couple hundred thousand when the point of sale comes, and that’s still a safe, great return! But a complex that cost you upwards of half a million, with a full renovation on top, will allow you to set the price at any point. Modern and contemporary buildings, with lots of space, are very attractive to the market at large, and you’ll attract the top 1% of buyers.
Sure, you don’t just get to a point where you can drop so much money on a home like this, which is why it’s key to work your way up in a house flipping manner. It’s more of a business, and a long term investment that you’ll see go up and down. Gain the necessary experience as you go, and learn how the market works.
Houses Retain Their Value
Houses tend to retain their value much better than any other kind of investment you could put your money into. They have a better chance of appreciating in value over time, rather than dropping to nothing or slowly depreciating over time, compared to the stock market or cryptocurrency that’s currently on offer.
Something like a townhouse could bring at least ten times the amount of value into your bank account compared to what you have right now. It’s real estate, which is valuable on name alone, in a prime location that plenty of people will be after, and you could very well sell only to the highest bidder. Or, if you plan to make money over time, renting out your house for another’s use can be a very lucrative market, in the right conditions.
But if you plan to just hang onto a house, you’ll have a home entirely to yourself, which could be used for a variety of purposes. All in all, a house is a tangible investment you could get your hands on, and it’s something millions of people around the world are going to have an interest in too, and it’s a lot easier to understand how to foreclose on a house compared to trying to invest in the global stock market!
It Looks Good on a Portfolio
An investment portfolio is nothing with a little diversity. You need to have your fingers in as many pies as possible to see a healthy and happy return on the money you put into an investment – rarely does a single stream of income work out in the long term, and we’re here to determine the best, low risk kind of assessment!
And when it comes to real estate, a house, apartment block, or commercial center looks very good on a portfolio. It shows you won’t put all your eggs in one basket, and you’re playing it safe. It shows you’ve got the chops to take something as tangible and (upfront) expensive as a property, and turn it into a goldmine. All in all, real estate is something most investors plan to show off, and if you’re looking to copy the greats in just how much money you plan to make with smart investments, popping a property alongside your stock market lines is a smart decision.
You’ve Got a Good Chance for a High Return
Of course, as we briefly touched on above, a house can pretty much guarantee you a high return. No matter how long it’s on the market, nor how many times you have to change the selling price or the monthly rent, you’re always going to have at least one interested party who wants to go all the way through.
There are competitive returns in the housing market; there have been notable gains over the years, and house prices have risen by at least 15% overall since 2000. Now could be a great time to hit the market with your property, for a higher return than any other time of the year.
Making an investment has risk, and you may not make as much money as you planned to. But the housing market has a lot more to offer than focusing on the stock market alone – make sure you remember this when house prices are affordably down!