With the recent fall in real estate prices, many are questioning the reasons to invest in real estate. However, like most other investments, falling prices should be looked upon as a possible buying opportunity as price fluctuations are a common occurrence in most markets. Though real estate investing is not for everyone, here are some of the reasons to invest in real estate.
In the USA and many other parts of the world, the increasing population helps to fuel the demand for residential and commercial properties as well as raw land. As demand increases, so will the price which can help an investor to make a profit on real estate purchased now.
They old saying that you should invest in real estate as they aren’t making more of it actually has a point. While most investments have risk from others making the same products and new products, there is only so much real estate. As cities (and populations) grow, people and businesses have to locate somewhere. Buying real estate in or near growing cities, in desired locations (waterfront, etc.), in high traffic areas, etc., can all be ways to profit from future growth.
Reduced Risk of Fraud
Though there are plenty of scams and scam artists involved in real estate, many people are more comfortable with real estate due to their distrust of Wall Street and the financial market as a whole. With real estate, the investor can see their investment, walk around on it, and know for certain that it is there. By purchasing locally listed real estate and avoiding complicated real estate schemes, investors in real estate can virtually eliminate the risk of fraud.
Enjoy the Investment Now
Real estate can be used for a primary residence, commercial business location, or other personal use as well as rented to others to allow the investor to gain an immediate benefit from the investment as well as a possible profit in the future.
Interest Rates are Low
Currently, interest rates are low and appear to be staying there while the market recovers. The cost of borrowing money directly impacts the profit potential of an investment and the lower the rate, the less increase in price the property will have to see to make a profit.
Though each investors situation will vary, one reason to invest in real estate is that the purchase and owning of real estate can have significant tax advantages now as well as in the future.