Do you wish that you could have passive income on a month-to-month basis without worrying about the state of the stock market? This desire leads many investors to consider real estate for their portfolio. Many people prefer investing in rental properties that can earn them more than their investments ever could without having to sell their holdings. However, others are still hesitant about the state of the real estate market and worry about the performance of their potential property.
Real estate investment is a relatively sound choice for your portfolio, but you don’t have to take our word for it. Here are a few of the solid reasons why you should consider real estate investment.
Better Income
The main reason why people first begin investing in the stock market is to yield more income for themselves with very little effort. Unfortunately, they are mostly operating under the assumption that all of the stocks they purchase will increase in value. This isn’t always the case, and you may not make any money unless you decide to sell your holdings in the future. You have a chance at a much better income through rental real estate than you do with the stock market.
Consider how much the value of money will change over the course of a decade. Inflation tends to cause the price of things to rise, but the mortgage on your investment property will remain the same. This means that you will be earning a much higher rent payment without any additional outlay of funds from you. Your cash flow is bound to continue increasing over time as inflation occurs.
Easier Reinvestment
Every month, a tenant is making a payment that covers your mortgage and then some. You will eventually use this money to pay off your loan in its entirety. That means that you can reallocate those funds to purchase a new property, repeating the entire process all over again. It is much more feasible to reinvest your money into new investments when you have a clear payoff point for the current investment.
Appreciation
While the stock market tends to fluctuate over a given period of time, a house almost always appreciates in value. You should see the value of your home rise over a given period of time, allowing you to command higher rental prices than you did in the past. This leads to even easier reinvestment and better income, particularly if you choose to sell this rental property in the future.
Deciding to go with real estate investment is a great way to grow your investment budget and generate some passive income for yourself. Once you own a property, make sure that you are working with reputable property management companies that can help you to protect your overall investment. At Pyramis Company, our realtors can help you to find the perfect property and occupy it with tenants all at the same time! Give us a call today to see how we can help you multiply your money!