Main Reasons to Invest in Realty Markets
Main Reasons to Invest in Realty
People invest in real estate because they mainly want regular income in the future from their house, office or property. Below mentioned are some main reasons for investing in the realty market.
Regular and Permanent Return on Investment:
A considerable sum of the total return from real estate comes from the income from rents that too for a longer period of time. Investments based on return income are less volatile compared to other investments.
Lack of Liquidity:
As such this is a disadvantage of this type of investment. You cannot convert your real estate investment into cash easily and fast. Selling your property could take months or years even.
Real estate has greater power to diversify your portfolio, it also has the lowest relation with other main types of assets. Therefore, adding real estate to your portfolio reduces the volatility of your entire portfolio. Moreover, it provides a higher return per unit of investment.
Hedging in the times of Inflation:
The literary meaning of hedging is that it is preventing the complete loss of an investment by partial counterbalance. As the country or society grows economically demand realty pushes rents to a higher level. This leads to the capital value of the properties going high. With the help of all these factors, the purchasing ability of capital is maintained by the property. Because of this some inflation related damages passes to the tenant and the owner' capital appreciates.