Why You Should Invest in Real Estate


Your investment portfolio should not consist of just stocks and bonds. You should also consider investing in real estate. Read on for some of the reasons that real estate should be part of your investment strategy.

Real Estate is a Real Asset

A real asset is something that has a physical substance, such as real estate, precious metals, land, and natural resources. According to real asset advisor and council candidate Steven Rosenblum, real estate will always have some value, even if the stock market crashes. This is because it is a tangible asset.

Real Estate Allows You To Diversify

When it comes to investing, you should not put all of your eggs into one basket. If you are mainly invested in stocks, a downturn in the stock market could really hurt you. If some of your assets are invested in real estate, you have invested in something that is safe and will not suffer when the stock market tanks.

You Have Some Control Over Your Investment

If you have invested in real estate directly, say by purchasing a property to rent out, you can make improvements to the property to increase its value. If you purchase stocks, you don’t have any control over how the company is run. After you make improvements to your property, you can rent it out for more money than before, or you can sell it for a profit.

You Are Building Equity

As you own the property and pay off the mortgage, you are building equity in the property. The equity is the portion of the property that you own. That is, the value of the property minus any loans you have on it is your equity in it. Your equity also increases as the property appreciates in value. You can make use of your equity in a property even if you don’t sell it. You can take out a home equity loan, which lets you use the equity for such purposes as paying down debt, financing more property, or whatever else you may decide.

You Have a Predictable Cash Flow

With real estate, you can predict how much cash flow you will have each month. You know your mortgage payment amount, rent coming in, maintenance expenses, and so on. So you can calculate your cash flow pretty accurately. In contrast, you don’t know how much money you will make in the stock market.

Real Estate Offers Tax Benefits

There are many tax laws that benefit real estate investors. There are many tax deductions you can take for your real estate, and when you sell it, the capital gains on it are not as high as for other investments. In addition, when you sell a property, you can purchase another one and defer any capital gains taxes.

As you can see, the advantages of investing in real estate are many. You will be able to diversify, gain tax advantages, and have control and predictability over your investments. These are all great reasons to make real estate a part of your investment portfolio.