Is real estate a good investment or not for someone who is just starting out?
If you’re searching for an answer to this question, then you’ve definitely come to the right place.
If you’re considering investing in real estate, but you’re lacking the sufficient knowledge or education to make your decision or to answer the question “is real estate a good investment”, then your first step will be to learn about the different advantages/disadvantages of investing in real estate.
So, to answer the question is real estate a good investment or not, you will have to start by educating yourself and reading about real estate investing to determine whether it is something that you want to get into or not.
However, before getting started, I will give you my straightforward personal answer to the question.
Is real estate a good investment?
Yes, it is. In fact, I consider real estate to be the best investment that anyone could make. Of course, same as any other type of investment, there are limitations and obstacles that you will need to overcome before investing in real estate. However, if carried out successfully, a real estate investment can reap hefty rewards, and you will find yourself living the dream of a successful real estate investor, and you can certainly build an entire wealth out of investing in real estate.
To learn more about all aspects of real estate investing, continue reading our blog.
So, let’s take a look at some of the biggest advantages and aspects of real estate investing to help you determine: is real estate a good investment?
Is Real Estate a Good Investment – Appreciation
First and foremost, one of the biggest and most noticeable advantages of investing in real estate, or in owning real estate properties in general, is appreciation.
Appreciation, as you might know, is the passive increase in a property’s value over time.
Most types of none-real estate properties in the world will typically depreciate over time. Cars, for example, will passively lose value as they age, while a real estate property will be worth much more the longer you keep hold of it.
While this is one of the main reasons why some investors choose real estate, it should be noted that investing in real estate JUST for appreciation is probably not a good move.
This is because although most real estate properties will appreciate over time, this appreciation and its rate are extremely difficult to predict, making it an unreliable metric to base your decisions on.
For this reason, real estate appreciation is typically considered as the icing on the cake. When you purchase an investment property, you should always purchase it with a purpose in mind, or a strategy to generate a profit off of this property. If that property happens to appreciate over time, this appreciation should be an added profit or a bonus, but it should not be the sole focus of your investment or the main source of income that you would like your investment property to have.
Related: 6 Things to Know About Real Estate Appreciation
Is Real Estate a Good Investment – Location
One of the major aspects of investing in real estate, and one which sets it apart from most if not all other types of investments, is that real estate properties are fixed and immovable properties (with the exception being mobile homes).
This can be looked at as both an advantage and a disadvantage to investing in real estate.
The main advantage of this aspect is that real estate properties are tangible assets, and they can be used for a multiple of purposes.
Millennials, for example, and based on a study, said that the main reason why they choose to invest in real estate over investing in stocks is that real estate properties are tangible, which gives them a sense of security in the assets that they have invested their money in.
The downside to this aspect, however, is that if you purchase an investment property in a location, and that location goes through changes that affect the performance of your investment property negatively, then you can’t move your investment to a different area or market where the performance can be better.
In addition to this aspect being an advantage/disadvantage, when investing in real estate location can be the number one determinant of the success of your investment. This means that it is the main aspect to consider and to decide on before making an investment, which is something that most other types of investments do not have.
Related: What Are the Best Locations for Cash Flow Properties in the US Real Estate Market?
Is Real Estate a Good Investment – Investment Strategies
One of the biggest advantages and my personal favorite aspect of real estate investing is the number of investment strategies that are available to you.
When investing in real estate, you will have a number of options that are available to you which you can choose from based on your own investment goals, personal skills and traits, and other aspects and preferences.
For example, if you want to make a quick profit in real estate, you can use a fixer-upper strategy to make a large amount of money in short periods of time. If you prefer having a steady source of income, however, then you might want to consider using a rental strategy.
Additionally, each investment strategy will have an optimal property type to invest in, which can also vary from one location to another.
Based on the needs and demand of your tenants, for example, you can choose to purchase an investment property and to rent it out either traditionally or through Airbnb, and you can choose to focus on vacation rentals, condos, multi-family homes, or whatever type of property.
These decisions will become much easier to make once you’ve gained enough knowledge about the market and the different types of properties and investment strategies. Once you understand these aspects well, you will then be able to optimize your investment strategy with ease and choose the perfect investment properties based on your own investment goals and preferences.
Related: Top Six Real Estate Investment Strategies
Is Real Estate a Good Investment?
My answer will always be yes!
If after reading this article you decide that your answer is yes as well, then your next step will be to take advantage of one of the most useful and unique tools that are available to you and that will help you in all the different aspects related to real estate investing – Mashvisor.
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Mashvisor can help you learn, find, analyze, compare, and close the deal faster than any other medium, which will give you an advantage over the other investors out there, and it will allow you to invest in the perfect investment property before someone else beats you to it.