The standard advice that you hear from financial experts is to put money into real estate. Investing is the best way to protect yourself from inflation and help build value. Most of the time, though, people are hesitant about putting money into real estate because of the high barrier to entry. But it can be worth it. Here are some reasons why:
Able to Earn Money
Many people think that when you are looking at houses for sale, you will end up living in them. But you can easily buy a home and immediately put it up for rent. Now, your purchase is earning you money, instead of costing you. Many landlords start this way. They buy a property and start renting it out. When the house is fully paid off, thanks to the earnings, the money generated is then used to buy more property. Pretty soon, you can own multiple rental properties earning you money.
Easy to Get into When You Are Young
Investing is all about long-term planning. Starting early is advisable. But most other investment options are not easy to begin. Stocks and other investment products can be pretty complicated. Real estate is comparatively simple. The great thing about it is that banks are very willing to help younger people when they need the money to break into real estate investing.
Additionally, young and single people are perfect for the landlord’s lifestyle. Most of the time, you move into a home to build it up for renting out. This is just not possible when you have a family.
Always on the Upswing
Stocks and other investment products fluctuate a lot in value. Sometimes they are up, and sometimes they are down. They can change from day to day. This is not the case when it comes to real estate. Most of the time, real estate’s value only goes up. There are times when the prices are like a bubble where they suddenly drop. However, real estate prices eventually recover, and you can expect the value of your investment to increase once again. This process takes a long time and is excellent for long-term value protection.
Protected from Inflation
The main reason you should be investing instead of saving money in a bank should be to protect yourself from inflation. As time passes, the cost of goods gets higher, and your savings usually lose a lot of buying power if left alone. But real estate grows with the economy, so it typically increases in value over time, matching the inflation rate. When you sell your property, you will like to get ahead of any inflationary pressure in the market. This means that the money you put into the real estate will be as valuable as ever.
Investing can be risky. But there are ways to lower the risks. Physical assets that you can develop and improve like land are a great way to hedge your bets. Besides that, they can also earn you money before you sell them off. Even a small real estate investment can become a big one in years to come.