by In2assets  |   January 24, 2024

Real Estate Investment

REAL ESTATE INVESTMENT THE WAY TO BUILD REAL WEALTH Investing in Brick and Mortar is widely seen as a good decision specifically in a volatile market for the following reasons. Opinion piece by Rainer Stenzhorn of In2assets the South African based Property company


Tangibility and Stability

Real estate is a tangible asset with intrinsic value. Unlike stocks or other financial instruments, you own a physical property, which tends to provide a sense of stability and security, especially during times of market volatility.

Income Generation

Property can generate regular income through rental payments. In uncertain economic conditions, having a steady rental income stream can provide a reliable source of cash flow, even if property values fluctuate.

Diversification 

Real estate is an excellent way to diversify an investment portfolio. Having a mix of assets, including property, can help spread risk and reduce the overall impact of market volatility on your portfolio.

Inflation Hedge

Real estate has historically acted as a hedge against inflation. Property values and rental income tend to increase over time, helping to offset the eroding effects of inflation on the purchasing power of money.

Long-Term Appreciation

While property values may experience short-term fluctuations, real estate has the potential for long-term appreciation. Over time, property values may increase, providing investors with capital gains.

Control over Investment 

Unlike some financial instruments, real estate investors have a certain level of control over their investment. Property owners can make improvements, manage expenses, and take strategic actions to enhance the value of their assets.

Leverage Opportunities

Real estate allows for the use of leverage through mortgages. This means investors can control a substantial asset with a relatively small amount of their own capital. Leverage can amplify returns, but it's important to be mindful of associated risks.

Tax Benefits

Many jurisdictions offer tax incentives for real estate investors. These can include deductions for mortgage interest, property taxes, and certain expenses related to property management.

Demand for Accommodation 

Regardless of economic conditions, there is a fundamental and constant demand for housing. People need places to live, and this basic human need provides a level of stability to the real estate market.

It's essential to note that while real estate can be a resilient investment, it also comes with its own set of risks and challenges. Market conditions, location, property management, and economic factors all play a role in the success of a real estate investment. Additionally, the performance of the real estate market can vary based on factors such as region and property type. As with any investment decision, thorough research and consideration of personal financial goals and risk tolerance are crucial end Stenzhorn his comments. 

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