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For most people, purchasing real estate is one of the biggest and most important investments they will ever make. However, it is important to remember that owning real estate is an investment, and like any other investment you will need to put in to it to get something out of it. If you are not prepared to put some effort into making your investment work for you, then investing in it can turn out to be pointless.
There are many advantages to real estate ownership. Subject to terms and conditions, you may be entitled to tax benefits in that the interest part of your mortgage payment may be tax deductible. You also have a real, tangible property which can provide you with the security and knowledge that you are likely to make a profit when you sell, allowing you to then invest in more real estate if you wish. Providing you are prepared to put the time and effort into maintaining and looking after your investment, you can make an impressive profit when you come to sell.
Real estate ownership provides financial security in many ways.
It is an investment which is likely to grow over the long-term, allowing you to profit upon sale. It also gives you the facility to raise collateral through equity loans and re-mortgaging. You may even decide to rent out your property, bringing in an additional monthly income and then still making a lump sum profit if and when you decide to sell.
Real estate can also come in the form of land ownership.
The purchase of land can provide similar financial security to that of property ownership. You may want to sell the land at a profit to another party who wishes to build on it. You could rent out the land, allowing the interested part to build on it and then charging rent on it. However, it is important that you do some thorough research and ensure that you are investing in land that is in a popular or an up and coming location, where people and companies are likely to want to build in the future.
If you are planning to or thinking about investing in real estate, there are some points that you should consider carefully:
Yes, real estate investment is likely to be a profitable one, but there are other factors associated with it. Firstly, it can be very time consuming. You will have to be prepared to put in the time to look after your investment if you hope to make a return upon it in the future. If you decide to rent out your property, you may have to deal with tenant problems. This may leave you open to financial and legal issues. And, at the end of the day, there is certainly no guarantee that you will make a profit when you sell. However, this said, real estate has historically shown a consistent growth in value over the long term.