Should you or should you not invest in real estate? That is the question. Often times that question involves a life savings, or at the very least "a lot of money". There are several reasons you should and should not. Here are a few of them.
Should Invest:
Income: You will be generating income, your very own business. You may be able to provide things for your family that you could not have otherwise
Inflation protection: Not only can your property make income, but it can also shield your money from inflation. it’s income that naturally keeps pace with inflation. Inflation can also increase the value of real estate and reduce the real burden of mortgage debt over time. For these reasons, it can be a great way to hedge against the possibility of rising inflation, which generally hurts both stocks and bonds. This is a key thing to think about!
Control: You can add additional value to real estate by purchasing a property you believe will appreciate faster than the overall market (the real estate market is much less efficient than the stock market so there are more opportunities to profit from superior knowledge), making improvements, and managing it yourself. You control your own destiny so to speak. You either make it or break it.
Should not Invest:
Breakdown: Your property will require repairs and upgrades at time. Are you able to preform upgrades and make repairs? You will hire it out you say? Well good luck because they costs a lot of money. Better hope that property is making serious cash flow when the city calls and says you need to upgrade all the electrical in the house...
Stuck: Real estate isn't the easiest thing to move. You have tens of thousands of dollars tied up into it and what happens when you need the cash, and you can't sell it?
In closing, why would you not want to invest in real estate? What else will you do with that cash you have? You could put it in a savings account and earn .001% or you could buy real estate and generate cashflow and make 10-20% on your cash. The option is yours, the debate is clear, yes both options good or bad, but I'm taking real estate all day...
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The Small Time Investor.
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