Investors are always looking for ways to invest their money wisely and build their wealth. If you’re wondering what the best way to invest money is, it’s safe to say that real estate is the answer! Many investors would choose to buy a real estate investment property over other investment like stocks and shares. Without further ado, here are the top reasons why real estate investing is the best way to invest money.
Real Estate Is the Best Way to Invest Money Because It’s Tangible
They’re called real for a reason. Investment properties are tangible assets, meaning they’re illiquid. Many take this feature as a disadvantage to real estate investing, but actually, it’s the opposite. Why? Because tangible assets will always have value, unlike intangible ones such as stocks, which can dip down to zero and lose all their value! This makes real estate the best way to invest money because it also acts as a hedge against inflation and economic uncertainties. Basically, if the costs of living increase in a certain housing market, then the values of investment properties will also rise.
Property investors can check the rental property before buying it. Moreover, the moment a real estate investor buys an investment property, he/she will have full control over the property. He/she’ll decide how to finance it, how much to charge tenants for rent, how much to spend on maintaining it, and for how long he/she’ll hold it until selling it.
Related: Selling an Investment Property: When Is the Right Time?
When you’re investing your money in intangible assets, on the other hand, you don’t get this much control over your investment. For example, the only choice stock investors can make is which company they want to invest their money in. After that, they have no power over their investment or what the company might do with their money. Therefore, when it comes to having control over an investment, real estate proves to be the best way to invest money.
Real Estate Is the Best Way to Invest Money Because of the Many Ways to Make Money
The second and probably the most common reason why so many choose real estate investing as the best way to invest money is the immensity of the housing market. The world of real estate investing is vast; property investors have the opportunity to make money in so many different ways.
A real estate investor could invest in a rental property for the long term or for the short term. There are a number of investment strategies which fall under each approach that a real estate investor could choose from. Examples are the buy-and-hold strategy (long term) and fix-and-flip strategy (short term).
Related: Real Estate Investing: Should You Go for Long Term or Short Term?
Property investors also have the ability to decide if they want to invest in commercial real estate or residential real estate. When investing in the latter, there are many different types of residential investment properties to invest in such as single-family homes, multi-family homes, condos, townhomes, etc. Another choice is to invest in traditional real estate or Airbnb investment properties.
Another proof that real estate is the best way to invest money is that a real estate investor also has the ability to make money without even buying a rental property! This is possible if the real estate investor decides to become a wholesaler or invest in real estate investment trusts (REITs). Property investors can even diversify and grow their investment portfolio by investing in different types of investment properties and following different investment strategies!
Make sure to check out Mashvisor’s investment property calculator to help you determine which investment property type and investment strategy are the best for you!
Real Estate Is the Best Way to Invest Money Because It Provides Better Returns
For any investor, the best way to invest money is the one which provides you with attractive returns which you can either save or reinvest. In general, real estate investing is the best way to invest money because it provides property investors with a steady source of cash flow (monthly rental income). Not only that, but a real estate investor can find ways to increase his/her rental cash flow and generate a higher return on investment.
Another reason as to why real estate is the best way to invest money is that the steady cash flow from investment properties makes it easier for property investors to manage their finances and plan ahead of time. This is not something you can do with other types of investments. For example, stocks do make good returns; however, stock investors only see their money when they sell their shares.
Real Estate Is the Best Way to Invest Money Because It’s Safe
There’s no doubt that the best way to invest money has to be safe. In general, real estate investing is very safe because investment properties are tangible, physical assets – meaning it’s technically impossible for property investors to lose everything with real estate investing as long as they’re smart!
Click here to start your search for the best investment property in the US housing market!
If the housing market is facing a crisis, just hold onto your rental property until the situation improves, and, as a result, you’ll build equity. In case of natural disasters, a fire, or destructive tenants, then don’t worry as your rental property is insured.
There’s a way to reduce and overcome almost every risk of real estate investing! In addition, the longer you hold onto a rental property and the more investment properties you own, the fewer risks you’ll face. Thus, if you’re looking for the best way to invest money, real estate investing is as safe as it gets.
Related: 10 Major Risks of Real Estate Investing and How to Reduce Them
Real Estate Is the Best Way to Invest Money Because of Tax Benefits
The final proof that real estate is the best way to invest money is the many tax benefits and advantages that come with buying an investment property. For example, your cash flow is tax-free. Moreover, property investors can deduct mortgage interest, property taxes, operation expenses, insurance, and depreciation from their taxes.
In addition, when a real estate investor sells an investment property and decides to reinvest the proceeds in another rental property, then he/she will not have to pay the capital gains tax. This is another proof as to why real estate investing is the best way to invest money.
Final Thoughts on Why Real Estate Is the Best Way to Invest Money
As you can see, real estate investing is the best way to invest money comparing to other investments for many reasons. Before you go ahead and buy an investment property, however, you should support yourself with the necessary knowledge and learn as much as possible about what it takes to become a real estate investor.
Mashvisor’s Knowledge Center is a great place to start educating yourself! It contains thousands of blogs, guides, and tips that empower property investors and shows them the way to a successful real estate investing career. Sign up for Mashvisor to receive our blogs as soon as they get published to stay updated on everything real estate.
Click here to search for the best investment property in the US housing market and start your career as a real estate investor!