The Benefits of Property Investment

Property investment is the secret route taken by many of the world’s millionaires today. Besides the monetary benefits that accrue to property owners, there are a host of other benefits of property of investment. Investment is essential to maximize the returns form savings that accumulate over time, since most people like to save a portion of their earnings, however small the amount may be. Over a period of time, the savings accumulate to form a lump sum that can be invested in stocks, bonds, fixed, deposits, precious metals or property. Property is not a paper asset, but very visible in its physical form. With financial uncertainties and risks involved while investing the other assets, property investment is safer and offers a large number of benefits. Some of the most significant benefits are discussed below.

Benefits

  • Property is less risky and therefore safer- Buying the right kind of property protects your investment from the risks plaguing the financial markets, and therefore proves to be a safer investment. Many people are skeptical about risky investments that might promise high returns but also carry the risk of losing it all. Property does not carry such risks, and when bought at the right time at the right price, its value is unlikely to fall and can never come down to zero. It is also less volatile.
  • Property investments are protected from fraud and cheating- this is due to their highly visible state and it is not just an asset on paper.
  • Property leads to tax savings- Tax savings indirectly mean added income since all property expenses, inclusive of depreciation and interest to be paid on loans taken, are tax deductible. So it is wiser to buy property rather than pay tax.
  • Provides short term returns in the form of rental income- Both commercial and residential property earn rent when leased out. This helps to supplement current earnings.
  • Long term returns accrue in the form of price appreciation- Prices of property appreciate over time, and property experts say that the value of property doubles in 7 years, making the rate of return equal to 8%, which is higher than most other financial options.
  • A forced savings investment- Buying property through mortgage, makes even the biggest spendthrifts save forcibly since they cannot afford to miss a mortgage payment.
  • Helps to upgrade and climb higher on the economic ladder- appreciation in property prices enables people to sell one property and upgrade to another better one. This cycle leads to higher levels of affluence.
  • Helps to raise funds in an emergency-Property serves as the most easily acceptable collateral and can be used to take a loan from banks or other institutions in an emergency.
  • An investment you can forget about- When purchased with long term plans, property can be invested in and forgotten about, especially when it is a piece of land in an upcoming area. This is not possible in other investments.

Property investment offers numerous benefits the biggest of which is the feeling of security that it brings, unlike any other investment. It is something to have and to hold.

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