Key advantages for investing in real estate and types of properties to invest in
Posted December 15, 2008 by Bernz
Why invest in real estate? The obvious reason is cash. But in addition to increasing your cash flow, there are two other reasons. I’ll explain all three and share some of real estate investing options that you might want to consider.
The first advantage to property ownership is appreciation. When a property appreciates it increases in value. Though generally it takes several years for real estate to appreciate at a rate equal to or greater than the rate of inflation. And when it does, the resulting advantage is a hedge against inflation.
Next, as a property owner you gain leverage. For example, when you invest in a property you gain the opportunity to use borrowed money to invest in some other asset. This could be the purchase of a vacation home, business, etc.
Finally, the obvious—cash flow. A real estate investment can give you steady, additional income. For example, you could rent the property or you could sell it at a cost that returns a profit.
What type of real estate properties might you consider investing in?
Residential rental property. These are commonly referred to as rental homes, apartments, or condominiums.
Office buildings. This could be a single building with several offices. Or multiple buildings, called office parks.
Retail Property. This includes stores, malls and shopping centers.
Industrial property which is also known as industrial parks.
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