What Role Should Property Play in Your Investment Portfolio?
An investor who does not consider adding property investment to his portfolio is missing a crucial piece of pie. According to a study done on British entrepreneurs, 30 percent of them said that channelling funds towards real estate is the best investment for the long haul. This reveals that property investment is an important addition to an investment portfolio. So, what are the roles a property can play in a given portfolio?
Increasing Values of Home Properties
There is always a high demand for housing in metropolitan areas since it is a major factor in determining the economic health of a given block. As we watch improvement in job creation opportunities, investments and other signs of positive growth in the economy, the demand for housing is increasing concurrently. Therefore, the investors must recognize that they need to fill this gap and shrink the supply-demand deficit in real estate.
Tax-free Cash Flow
In property investment, there is often depreciation and reduction of mortgage interests due to deductions. This means that the cash flow from property investment is likely to be tax-free in the end. It may seem quite elusive to believe because most investors recognize the tough taxation rules provided by the government. However, you can watch your portfolio grow each day with continuous cash flow in real estate without having to brush shoulders with the tax department at any point.
Renting on the Rise
A market research by Pricewaterhouse Coopers reveals that more investors believe renting is on the rise among consumers nowadays. This has been fuelled by the rise of single family homes as an investment opportunity among entrepreneurs who are looking forward to expanding their investment portfolio. As a result of this trend, more people see a lucrative opportunity by investing in property. Some people even refer to it as leverage for retirement.
Guaranteed High Returns
Property investment is among the low-risk investments that offer high returns. In the UK, a property owner is guaranteed of a 15 percent return on his overall investment during the first fiscal year. This number increases to 30 percent for the next year. Most property investors break even by the end of the fifth year. This means that property investment is a guaranteed profit raking venture if managed correctly.
Everything about property investment is simple. From the development process all the way to the purchase point, you don’t need to sweat or scratch your head off to make things work. At the end of the day, everyone wants something that can give them serious money without having to put in too much effort on it. However, you can contact other companies that offer advice on wealth management and protection if you find the whole thing overwhelming.
In simple terms, investing in property should be at the top spot when considering expanding your portfolio because you are guaranteed of positive outcome all the way.