If you are planning to retire early, why not invest in real estate
Immediately after joining employment, people start worrying about their retirement. With inflation, the rising cost of life and healthcare, and family, all these things haunt many, and they start working towards saving and investing money in multiple options.
While there is a craze among youngsters in investing in mutual funds and shares, it has to be noted that real estate investment should be a part of one’s portfolio. Traditionally real estate investment is seen as a worthy option.
Plenty of choice
There are several options to invest in real estate. You can purchase single/double bedroom apartments, rent them out, and collect monthly rent. While this is an additional income source, the property value will keep increasing. And you can sell it when you want a huge amount in hand. However, you must ensure that you’re investing in the right property. You can invest in a building with multiple apartments if you have more money. It will give you a steady stream of rentals month on month. Real estate is a long-term investment; you can hold it for many years and wait for it to appreciate.
A major advantage of investing in real estate is that it can be financed through loans. Unlike bonds, mutual funds, or stocks, financing through debt makes it possible to invest more than their current net worth. This option makes property investment a realistic opportunity for ambitious investors. Moreover, interest rates on property finance are much lower than the interest rates for vehicles or other loans.
The biggest goal of real estate investing is to grow your money or build capital. When you sell your property after it has been appreciated, it will increase your capital. Also, real estate is less volatile than stocks. The increase or decrease in the prices is gradual in real estate, whereas in stocks, it is quicker, thereby adding to the risk.
One of the major benefits of real estate investment is the tax benefits associated with it. This is very useful for those who have started their careers recently as it helps them to save a considerable amount.
When you invest in rent-yielding properties, you are generating passive income monthly from the rental.
When you invest in land parcels, there is no maintenance cost involved; unlike a building, there is no depreciation. There is a high potential for appreciation. Investing in land/plots at a young age would become a huge asset by the time you reach your 40s or 50s.
If you want to retire early, you must make wise investment decisions. Real estate investment is an option one should consider. It is also important that you start early. You should begin investing as soon as you start earning. Since, at the beginning of your career, you’re in your prime with a few liabilities.
Though investing in real estate is considered safe and offers high potential, you need to keep your options flexible. If you notice that a particular area or property is depreciating, you should notice it and sell your property and reinvest. Such tweaking and active involvement will help you retire early with a huge corpus.