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There will come a certain point in your life when you start thinking about investing some of your money in order to grow your wealth. But if you’re not very well versed in the ins and outs of finance, knowing just how and where to invest your money can seem very overwhelming. With so many options out there, it can be a real challenge to know what investment opportunities are going to be best for you, your finances, and your personality. So if you’ve been thinking about real estate investing but aren’t sure if it’s the right choice for you, here are three reasons you may want to begin your investment future with real estate.
A Good Return On Your Investment Without Too Much Risk
One reason why many people choose to invest in real estate rather than other investment options is because of both the potential return on your investment and the amount of risk that’s usually involved with real estate. According to Noel Neo, a contributor to Investopedia.com, the National Council of Real Estate Investment Fiduciaries reported that commercial real estate investments have averaged just under 10 percent on their returns over the last five years. In addition to this type of return on your investment, real estate also is relatively low in volatility compared to other forms of investing, which means you’re taking on less risk while still getting a decent ROI.
Appreciation Of Real Estate Values
In addition to the positive aspects mentioned above, real estate is also a great option for investing because of how real estate values generally appreciate over time. According to James Harris, a contributor to Entrepreneur.com, real estate prices have always been on the rise, even after small crashes in the market. Housing prices always seem to bounce back and increase as the years go on, which means that any real estate you purchase today will be worth even more money in the future, making it a potentially very profitable investment.
To Generate Passive Income
For many people just getting started with investing, real estate investing can be a great first step because you allows you to bring in a relatively passive income. According to Brady Hanna and Benilyn Formoso-Suralta, contributors to Fit Small Business, real estate investments will always be making you money even when you’re not doing anything with them. Once you’ve been able to buy the property or properties and found someone to manage them for you, you can essentially sit back and relax as the income just rolls in on its own each month.
If you’re thinking about dipping your toes into investments, consider using the information mentioned above to help you see if real estate investing will be one of the best options for you.