How Property Can Increase Your Wealth

Property investment is now acknowledged as one of the best ways of increasing wealth and making money. Experts find that the value of property doubles in approximately seven years, making it an asset that provides a good rate of return. Property purchased wisely involves buying at the right location at the right time and at the right price. Compared to other investment channels investing in property is safer, far removed from cyclical or other down swings and uncertainties, and also one serves as the most acceptable form of collateral.

Property increases wealth in the following ways:

  1. Appreciates in value- Property increases in value steadily to double in around seven years, revealing an annual return of 8%. Even if property, in the form of land, residential or commercial, is kept vacant, it will continue to appreciate in value.
  2. Buy low and sell high- Another way of increasing wealth through property investment is buying smartly when property prices are low, for example, in a new locality or upcoming area, and selling them after a few years when the value appreciates. This yields high returns and helps to enhance wealth.
  3. Steady returns through rental income – Property investment serves to supplement existing incomes when rented out to others. Rent is paid for use of property when taken on lease. The rental amount also increases as property prices escalate.
  4. Upgrading- Property investments can be used to upgrade by selling an existing property, using the amount received to make a down payment for a better, more expensive property, and using the refinancing option. Refinancing enables a home loan borrower to pay his existing loan with the new loan he takes by placing the property as collateral. This provides an easy route to stretching finances for better property investment opportunities.
  5. Tax benefits- Home owners can avail of tax benefits from the government and save substantial amounts in taxes. The tax rules and the tax concessions for home ownership or rebates on mortgage payments vary from country to country, but the tax saved is a form of wealth earned.
  6. Purchasing undervalued property- The real estate market often has some properties on sale that are being sold for less than their market price. Such undervalued properties can be purchased instantly and sold after some time to make huge profits. These opportunities appear as distress sales, and other reasons forcing owners to sell at prices lower than their market worth, just to sell it as fast as possible.
  7. Renovation before sale- Any expense incurred on a property is bound to positively enhance its value. A run down house can be spruced up and by spending some money on repairs and renovations, it can be made into a livable place, which then may be bought for a higher price by someone who sees it as a ready-to-live house.

Property investment is by far one of the most risk free investments available, a physical asset that does not just exist on paper. With increasing populations the demand for property is bound to increase which will then outstrip the supply, leading to an escalation in prices. This will then mean an increase in wealth and yield high returns on the initial investment made.

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