Some people believe that keeping money in the bank is a good strategy for generating more income. While saving is very good, it’s not the best way to increase your income.
The returns from investing in real estate projects far exceed those from bank savings. Interested in learning more? In the following article, we’ll show you why investing in real estateis more convenient.
1. Real estate will not lose value over time
Inflation is a widespread increase in prices in a country, making basic goods necessary for daily life more expensive. As a result, the purchasing power of the currency decreases, greece phone number library affecting consumers’ finances.
Obviously, this is bad, but let us illustrate with an example: Imagine you have S/1,000 in a savings account that pays 2% interest. After a year, you would earn S/20 in interest, for a total of S/1,020.
And let’s suppose the inflation rate for that year is 2.5%. Therefore, even though you’ve earned S/. 20 in theory, the purchasing power of your S/. 1,000 would now be only S/. 994.5. This means that, despite having saved that amount, it’s worth less in real terms. On the other hand, investing in assets allows you to protect your money, as this tends to maintain or increase its value over time.
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2. The real estate sector offers great benefits
Real estate investment is superior to other options because it doesn’t depend heavily on luck. The profitability you obtain is closely related to the quality of the business you execute. You’ll see profits from to much more.
Some people have even achieved significant returns because they were able to recoup their initial investment and retain their real estate. Inflation won’t seem like such a big problem when you see these kinds of results.
On the other hand, what is a chandelier and how is it installed? investing in real estate helps you achieve your longer-term goals, such as retirement or a college fund for your future children or grandchildren. When it comes to investing, patience is key.
3. The value of real estate increases
Real estate generally provides security and protection because it appreciates in value. Its value is unlikely to deteriorate; on the contrary, it will maintain its current price or increase.
This characteristic makes real estate an attractive option for those seeking long-term financial stability. Unlike other assets, such as stocks or currencies, bgb directory which fluctuate unpredictably, real estate typically maintains sustained growth over time.
Another factor driving their appreciation is urban development. Infrastructure, access to services, and economic expansion in certain areas increase interest in certain apartments, which boosts their market value.
4. Your income increases through rent
Another advantage of real estate investmentis the opportunity to earn income through rentals. You’ll be able to generate profits from the appreciation of the property’s value and profitability by leasing it out.
Of course, there are other benefits, such as using the property price to borrow money and allocate it to new opportunities. Having a passive cash flow also allows you to cover associated expenses, such as maintenance, taxes, or improvements, without affecting your initial capital.
This makes leasing a sustainable and profitable long-term strategy, whether through traditional contracts or short-term rentals on platforms like Airbnb, depending on the type of property and its location.
5. Real estate is a hedge against inflation
Economic experts predict that global inflation will rise in the coming years. Some also point out that real estate is generally a convenient option for protecting against the effects of this phenomenon.
Its value is likely to increase, while money in the bank may not. In fact, the purchasing power of money could be reduced as a result. In contrast, housing demand continues to rise, driven by population growth and urban development.
These factors contribute to making properties solid assets and less vulnerable to market volatility, offering a secure alternative for those seeking to preserve their wealth.
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6. Access to a loan becomes easier
Another advantage of owning a home, according to some financial experts, is that you’d own it outright and could use it as collateral to apply for a loan. You also have the option to refinance it and withdraw the equity to have it in cash.
This way, you can access better financing conditions, such as lower interest rates and flexible terms. With solid backing, banks assume less risk, making it easier to obtain the necessary credit for various investments or real estate projects .
In addition, this alternative provides greater economic stability, since having real estate as collateral gives confidence to lenders, allowing access to higher amounts and greater financing opportunities.
So far, we’ve seen why investing in real estate is better than saving in the bank . If you haven’t invested in this sector yet, now is a great time to do so. There are many opportunities today for you to buy a property and start generating income through rentals, so don’t hesitate and invest now!