Real Estate Guide for Beginners
A property which consists of land or any building is known as real estate, whereas the business of buying, selling or renting properties is known as real estate business. Agricultural, commercial, industrial and residential are the four types of real estate. The real estate investment is very profitable as eight out of ten rich people in the world have attained their wealth by investing in properties. If you are planning to invest, it’s better to first know the benefits, considerations and ways of investing in real estate. Here is the complete real estate guide for beginners.
5 Benefits of Real Estate Investing
The real estate investment has five major benefits. The first advantage is the tax relief. People pay tax on their incomes but there is no tax on rental income in most countries. The second advantage is the steady income. Investing in real estate provides the constant cash flow in form of monthly rental income. The third advantage is the security. Real estate investment is the ideal way to save or hedge your money against inflation. The fourth advantage is the price appreciation as the value of real estate increases with the time. The fifth advantage is the ease to pay loans. Investors can use the rental incomes to pay mortgages or any other liabilities.
5 Things to Consider Before Real Estate Investing
There are 5 most important things you should consider before real estate investing. Firstly you should consider your affordability. Check your credit report and loan availability before investing in real estate. Secondly check the economic situation of the region where you want to invest. If economy is growing then property price will increase and vice versa. Thirdly consider the real estate market. Buying a property in buyers market will save you a lot of money. But buying a property in sellers market will cost you more. Fourthly consider the location as it’s the most important factor that impacts real estate price. Good location increases the real estate price where as bad location decreases the property value. Fifthly check the law and order situation of the region. High security level of an area is the indication that property price will increase.
5 Ways to Invest in Real Estate
There are five simple ways to invest in real estate. The first way is to buy a home for living. This will help you to save the monthly rent and earn profit by selling your home when its value increases. The second option is the buy to let investment. This helps to generate monthly income and property price also appreciates with the time. The third way is to buy an undervalue property. Just renovate and sell it at a good profit. The fourth way is to invest in the funds of real estate project. These funds have high liquidity as you can easily withdraw them. The fifth way is to buy real estate shares of the companies which have successful business records.