IS REAL ESTATE A PROFITABLE INVESTMENT?

Real estate is a great investment for several reasons. You can enjoy an magnificent rate of returns, amazing tax advantages and leverage real estate to build your wealth. Here are the major five reasons why real estate is a colossal investment.

Real estate provides better returns than the stock market without as much volatility.

Historically in real estate, your risk of loss is minimized by the length of time you hold on to your property. When the market appreciates, so does the value of your home, and as a result, you build equity. The risk never changes in the stock market and there are numerous factors beyond your control that can negatively impact your investment. Real estate provides you more control of your investment because your property is a tangible asset that you can leverage to capitalize on numerous revenue streams, while enjoying capital appreciation.

Real estate values will always increase over time. History proves that the longer you hold onto your real estate, the more money you will make. The housing market has always recovered from past bubbles that caused home appreciation to slip, and for those who held on to their investments during those uncertain times, prices have returned to normal, and appreciation is back on track.

An investment in real estate can also diversify your portfolio.If you've ever spoken to a financial planner about investing, then you are very aware of the importance of diversification. When you diversify your portfolio, you spread out the risk. Real estate will always serve as a safe tangible asset to mitigate the risk in your portfolio. Many have amassed wealth by solely investing in real estate.

Real estate has a high tangible asset value.There will always be value in your land, and value in your home – real estate investment will never be ZERO. Other investments can leave you with little to no tangible asset value such as a stock which can dip to zero, or a new car which decreases in value over time. Home owners insurance will protect your investment in real estate, so be sure to get the best policy available so your asset is protected in the worst-case scenario. I will suggest that Insurance companies should actually finance real estate in Nigeria, because they will be the most beneficiaries.

Real estate investing comes with numerous tax benefits.You can get tax deductions on mortgage interest, cash flow from investment properties, operating expenses and costs, property taxes, insurance and depreciation (even if the property gains value) and other benefits. The end of the year is a very busy time for real estate because people want to take advantage of the numerous tax benefits before the end of the year maybe!