Advantages and Disadvantages of Real Estate Investing

Advantages and Disadvantages of Real Estate Investing
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10:12 AM 07 Feb 2019

Despite the economic circumstances, opting for a real estate investment has always been an excellent way to monetise your capital. This is because having a property represents a higher degree of security with respect to other alternatives.  Investing in real estate is currently the best option for saving money.

If your intention is to own property, then look at below points about the advantages and disadvantages of investing in a property.

Increase in Value of the Property

Investing in a property is a wise decision, because, with the passage of time the value of the property will increase and your investment will obtain excellent returns on the value of the property. You can achieve great profits. A house or apartment can generate a lot of value depending on its location such as

  • Improvements in the connectivity of the area with the inclusion of Metro stations
  • Improvements in neighbourhood security
  • Presence of education centres and shopping centres

Greater Ease of Rent

  • You can invest in real estate and can generate immediate profit by renting out the home.
  • After some time the rent could be increased, or you can sell the house anytime and get the money.

Security

  • Buying a residential property can offer the buyer a sense of security because the value of the house does not tend to fluctuate as much as other assets such as stocks and bonds.
  • So, the investor will always earn a profit on the house investment.
  • However, housing prices do not tend to change in the short term, and they may increase or decrease in value in the longer term.
  • Therefore, it is essential for the investor to thoroughly research the area before making a purchase.

Inheritable Heritage for the Family

  • You can leave your house to your family members after your demise.
  •  It is always a secure investment to take care of your family after your death.
  • So, real estate investment is one of the best options and will always generate income and profit.

Leverage

  • With the purchase of property, an investor attains financial leverage.
  • The house owner can borrow money from banks as mortgage loan, home equity loan, mortgage REIT (Real Estate Investment Trust) using the real property as collateral.
  • The home buyer has to put only a fraction of the purchase price as a down payment.

However, the housing investment also have some disadvantages are as follows

Home Management

  • Investment in the housing means that we have to take more management time.
  • The owner must assist the tenant for specific maintenance and repair tasks. Repairs could result in major expenses.
  • Therefore, high expenses will decrease your profitability.

Expenses and Tenants

  • Maintaining real estate can be expensive.
  •  Real estate taxes must be paid, and the property must be kept up and repairs must be done.
  • In some cases, landlords may end up with tenants who damage the property or fail to pay rent, and it can be a long process to evict them.

The acquisition of property has become simple and safe now. Just visit www.propertyadviser.in, we guide you with accurate information of properties in Hyderabad. You can filter with price, available units, location, facings and many more. Pave the way to reach your dream home.

 

 

By: Shailaja K