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Why Real Estate Is a Good Investment?

Real Estate Is a Good InvestmentIn the past, many people took up property as a form of investment. The very first real estate transaction was reputed to be recorded in clay tablets dug up along the Tigris River. It was for a parcel of land measuring about four hundred square feet in today’s size in exchange for four goats and two bushels of wheat. Real estate investment has since evolved a lot, yet the underlying drivers of the matter are still the same.

One of it would be gross spendable income, in other words, cash-flow. This refers to the amount you can pocket after maintenance fees and mortgage payments have been made, bear in mind that income tax payments have not been taken into account. Although it takes some time to find a good property, it’s worth the time and effort to have done so. It provides you with positive cash-flow in the form of rents, after paying for the maintenance and bank loans. Best of all, it generates a cash-flow on a monthly basis, allowing you to be taking some steps in the direction of being financially-free.

Another one of the benefits that it brings would be equity income, also referred to as principal reduction. Whenever a mortgage payment on a property is made, a portion of the payment goes to the lender as interest and the rest reduces the balance on the loan. This equity income can come up to be quite a substantial amount. Although it cannot be used, the income streams in at the instance when your property is sold, you owe less on the mortgage, meaning that you will be able to receive more money once the deal is done!

It also results in inflation becoming your new found friend! It works for you instead of against you. In each year, due to inflation, your investment property appreciates in value. Furthermore, the amount of land we have is limited. This means that the value of land increases each year, making real estate investment a safe and lucrative way against inflation.

Leverage is another thing that exists in real estate investment which is attributed as one of the attractive factors. By taking up a mortgage loan from the bank, you can actually enjoy the leverage arising from the debt. In Singapore, banks are willing to provide a housing loan of up to 80%. For example, you invest in a property for $1,000,000 and put a down payment of $200,000 in both cash and CPF funds. A couple of years wait sees the property price appreciates to $1,200,000. With the successful sale of the property, you actually net in $200,000, seeing a 100% return on your down payment.

You also have control over your real estate investment. You invest in a particular property and you run the show from there. Although there might be external factors which might affect your investment, you are largely able to react to the current situation and come up with a possible solution in response.

There are many other reasons why real estate a good investment that is worth your time and effort, but these are some that we have listed for you.

Kelly is a highly experience and motivated real estate agent in Singapore. Her analytical nature and a sharp sense of market trend in the Singapore prime districts have consistently help her clients profit from their Singapore prime investments.

To find out more about the available investment opportunities in Singapore property investment, drop Kelly an enquiry and she will be glad to assist you.

photo credit: lubavitchofhowardcounty.org




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