Private investors and companies have over the years made vast fortunes in real estate and housing. Property is considered a stable investment because it is a real asset that protects against inflation. Also, you can borrow money from the banks to invest in rental properties.
Invest in real estate
If an asset is available in limited edition, the price increases, housing is such an asset. In the major cities, there is often no land or area to build real estate so prices will rise later. There are also no building plans to build on the altitude; all you can do is build in city outskirts or tear down buildings in central parts.
Benefits of own rental properties
- A cash flow each month with money in which is highly predictable compared with other industries (if the rental rate is even and high)
- You can borrow tax-free money by the bank who would otherwise have taken the time to work together
- Since real estate is not market-priced from day to day, they are easier to borrow (the risk lower, which makes the bank gladly lend)
- The leverage of force allows you to get an outstanding return on your equity
- Tax benefits using depreciation that reduce the tax base each year
- Is the easiest form of business, hard to fail if you have knowledge and money
- Excellent protection against inflation if we in the future would have such an economic climate
Disadvantages of investing in real estate
- Banks may at some times be lump-backed because rental property purchases are not government-subsidized as houses or apartment purchases
- You will almost always have to take advantage of your first purchase personally
- Greater involvement than shares and sometimes in unforeseen times is required.
- Loans with high leverage always involve a high risk of a property crash. High profitability can reduce that risk