The great and eternal benefit of investing in property is long term wealth generation. Although millennials are often the generation that is most associated with being unable to afford property, 85% of them still consider it an excellent investment for long term financial security.
Furthermore, it is indeed the case that property makes for a very sensible investment, one that can be expected to show healthy returns over a long period – with the possibility of a “cash in” at the end.
This is why many see property investment as a profitable game to get in on. Investment in property does not just mean long-term benefits like asset appreciation and equity growth. If it is a rental property, then it offers an immediate and lasting cash flow as well.
Nevertheless, many who come to real estate investment for the first time can become a little daunted at what the entire process involves. For one thing, you need to go about it all in an honest and legal way. Secondly, you need to have the smarts to tell a good property investment from a bad one.
CityHome Collective, a real estate brokerage specializing in luxury homes and condos in Salt Lake City and beyond, advise that the services of a good realtor is essential – especially if you are new to property investment. The kind of local market knowledge and expertise a realtor offers are still essential if you want to secure a good investment.
Dispelling Some Myths
As daunting as it can be though, many are daunted for the wrong reasons. Here follows some myths about property investment:
You Need Significant Capital to Get Started
For sure, you should not be insolvent, but the idea that you need a big wad of cash to make that initial investment in property is not true. Property financing is usually an option, and more commonly an option with rental properties. The reason for this is simply that rental properties earn rent, so the means of repayment are present.
Indeed, it works out in everybody’s favor to do this as it means returns can start being generated much faster.
It’s Better in Cities
Big cities are known to offer more potential tenants, more potential buyers, and more reasons for them to come. But urban areas are also considered “hot”. This means more competition for houses and, accordingly, higher prices. Depending on your situation, this could end up pricing out the very people you want to attract.
Yes, some types of real estate investment can be risky, but real estate investment in general is actually not considered one of the riskier investments a person can make. This is because houses are sturdy, lasting things that generally appreciate in value over time.
Far from being risky, properties can weather times of financial uncertainty better than some other investments – for example, stocks.
Rental Properties Are a Lot of Work and Stress
For sure, if you purchase a rental property, that makes you a landlord with specific legal responsibilities to you tenants. You will need to perform regular maintenance and respect their privacy. You might also need to occasionally make some repairs.
Nevertheless, over on the financial side of things, a rental property is the ultimate form of passive income. You should plan out your investment, but the total amount of work you need to do is likely to be far less than any job.
So, that’s the how and why of investing in property for the first time. And the ultimate benefit of this type of investment is that there are few more secure ways to plan for the future.