Looking for risk-free investment is like looking for utopia on the Earth. Every benefit that one draws from ploughing money into the realty sector is balanced by a minimum of one detriment.

For those who are under the impression that real estate investment is nothing but a pot of gold, riskless investment channel; they are living in a pipedream. Risk-free investment has no practical existence in the real world. For every positivity profited by investing in the realty market, there dwells at least one negativity. This is exactly why, it is crucial to get to know the profits and perils that tag along with real estate investment.

The Nice

Commendable returns

There is a lot of money making scope in real estate investment. In general, property rates keep on rising with the passage of time. Rents coming in from leasing property are also a good source of alternative income. Pouring money into a lucrative property deal generates profitable inflation-adaptable returns.

Buffer from other investments

Diversification of investments in a variety of asset classes is necessary. Investment in the realty sector provides the investor with benefits, typically during a period when the performance of stock and bond markets is doing a bad job.

Tax benefits

The investor can assert claim on numerous abatements on tax returns; a few of which are repairs and maintenance outlay, insurance, architecture depreciation, interest compensated on loan and a lot of others.

 

 

 

The Vice

Liquidity

People turn to assets for their investment because they are looking to safeguard their future. They are able to put their property to use in situations wherein their funds dry up at any point of time in life. Nonetheless, real estate investment is not a liquid one. Selling a property and assembling finances can be time-consuming.

Interest rate

If one enters the world of real estate investment is done via the loan avenue, the predicament confronting investors is fluctuating interest rates. When interest rates sky-rocket, they bring upon a financial anxiety for investors. Steep rates of interest are also antagonistic towards liquidity.

Sole investment

There are also investors who pump all their capital into real estate. In such cases, if the property in question is not the right thing to invest in, they are extending an invitation to the disastrous risk of forfeiting all their money.

Cost

There are quite a few other holding costs that are attached to real estate investment. A few of these are property taxes, commission, upkeep and repairs costs and some others. It becomes problematic to endure costs when the property continues to be unoccupied and the income generating source is frozen.

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