Why Real Estate is considered a shock proof asset
By magnoliaAdmin | May 9, 2022
Real estate is the only asset that can never lose its value. Not even if the entire world economy goes down the drain. I’m not talking about gold, diamonds or oil here. All these are just ‘tools’ whose value rises and falls depending on how much we need them. But real estate always has a constant value for our use and is considered a shockproof asset. In this article, we are describing Why Real Estate is considered a shockproof asset.
The reason is very simple – land is something tangible. No matter what happens around us (global recession, war, terrorist attacks, etc.) people will always need houses.
Real estate is one of the best investments for many reasons. You can enjoy an excellent rate of returns, amazing tax advantages and leverage real estate to build your future assets. Here we are going to discuss why real estate is considered a shockproof asset?
Over the last several years, real estate investments have generated steady cash flow and return significantly above traditional sources of yield—such as corporate debt—with only slightly riskier.
Now we are describing Why Real Estate is considered a shockproof asset.
1. Is buying a home a good investment?
The idea that a home is a great investment stems from the fact that real estate prices tend to rise, at least historically speaking. Now there’s no chance to predict the future real estate market value.
First, you need to understand your motivation for buying a home. If you want to live in it, then you probably don’t need to think about your home in terms of profits and losses. If you want to make money in real estate, then you need to enter the transaction with a proper exit strategy.
When the market reaches your price point, you need to sell the property just as you would sell a stock that has appreciated. This might not be a practical approach for your primary residence, depending on your lifestyle.
2. Real estate has a substantive assets value:
There will always be value in your land, and also value in your home. Investments can leave you with little to no substantive asset value, such as a stock which can dip to zero during a financial recession or any geopolitical turmoil, or a branded car which decreases in value over time. Homeowner’s insurance will protect your investment in the real estate industry.
3. The values of real estate will always increase:
The longer you hold onto your real estate property, the more money you will make. The real estate 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. Real estate investors in the top-performing markets would always enjoy a windfall.
4. Real estate investing comes with a large number of tax benefits:
You can get tax deductions on mortgage interest, cash flow from investment properties, operating expenses and costs, property taxes, insurance and depreciation and gets other benefits. The end of the year is a busy time for real estate because people want to take advantage of the numerous tax benefits before the end of the year.
To conclude, as an investor if you are looking for a safe and shockproof investment with a good return then real estate is your best bet.
-By Moon Sarkar