Why invest in real estate?

Real estate, in simple terms, is the buying, renting, and selling of houses or properties (Bla Bolig). The real estate industry is one of the fastest developing businesses and has slowly gained popularity locally and globally due to its high market returns and profitability. Due to the high returns, more investors are attracted to the real estate industry. Real estate has several benefits, including:



Appreciation

One main benefit of real estate is its appreciation nature. Just as land appreciates, the properties of real estate increase in value over a given period (https://blabolig.no/ferdighus/herskapelig/). Properties in real estate are estimated to have a 6 percent annual appreciation making real estate a very profitable investment.

Constant cash flow

Real estate earns the owner’s income from the rent and mortgage collected. Rent and mortgage are collected on a monthly or annual basis, meaning that the owners are assured of constant cash flow of income from the tenants.

Lower tax rates

In investment, tax is paid in terms of capital gains tax. For real estate, the capital gains tax rate is lower compared to other industries, therefore, increasing the profits obtained from real estate investment.

Improvisation of property: Lastly, real estate properties can be improvised to the investor’s satisfaction. Through improving the properties, the investor can increase the value of their property and sell or rent out at higher prices leading to an increase in income.



Depreciation

Although real estate appreciates and the value increases, there is also depreciation that occurs in the buildings. This is considered a benefit because there is a non – cash depreciation expense that can be claimed and, in turn, help reduce the tax payable.

No barriers to entry

The real estate industry has any barriers to entry as it allows room for any potential investor (https://blabolig.no/ferdighus/moderne/https://blabolig.no/ferdighus/moderne/). Investors are free to join the market without any restrictions.

Simple and easy to understand:

Real estate is not complicated like some industries; it is simply the buying, renting, and selling of homes, houses, or buildings. The market trends are also easy to understand with the help of a real estate agent.

Why invest in real estate?