Real estate investing involves the ownership, purchase, management, rental and/or sale of real estate for profit. Improvement of realty property as part of a real estate investment strategy is generally considered to be a sub-specialty of real estate investing called real estate development.
The benefits of investing in real estate include passive income, stable cash flow, tax advantages, diversification, and leverage. Real estate investment trusts (REITs) offer a way to invest in real estate without having to own, operate, or finance properties.
Real estate is generally a great investment option. It can generate ongoing passive income and can be a good long-term investment if the value increases over time. You may even use it as a part of your overall strategy to begin building wealth.
Can We Achieve a Million Dollar Net Worth Investing in Real Estate?
When you invest in real estate, you could achieve a million-dollar or greater net worth simply because the properties you own and manage have gone up in value over the years. Few of us have the cash on hand to buy the property outright.
This is why many put a down payment down on a property before repairing it.
Main Advantages of Investment in Real Estate
Better resale value: This is one of the reasons why single-family homes are the best real estate investment strategy for beginner investors. They get a better resale value as time passes. Of course, it depends on a few factors such as the location and the state of the rental property.
Some people purchase investment properties for tax deductible purposes while the others purchase the properties for more income. The interest charged on investment loan is normally tax deductible. Investors can use it to claim tax or pay lesser tax.
Growth of Population and Increased Demand for Property
A rising population will put even more pressure on housing; also, the rise in the number of households is greater than the rise in the population due to the growth of single occupancy households.
As population growth is an underlying factor for the demand of housing, without new supply of dwellings, it pushes up the prices for both renting and purchasing dwellings.
The Bottom Line
It is possible to build a net worth of one million dollars in a couple of years with real estate. It also may take five years, ten years, or even fifteen years. Only five percent of households are millionaires so even if it takes a while you will be ahead of the pack. Real Estate is a stable and real investment and is less risky among other investment options.