‘Why’ and ‘Why not’ of Real Estate Investing

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Real estate investing is one of the best ways to earn a passive income. A lot has been said about how real estate investment has changed people’s fortune when smartly done. Undoubtedly, real estate holds its prominent place in the portfolio of every solemn and sincere investor.

Real estate crowdfunding is also taking center stage lately. It is being projected that real estate crowdfunding might close deals totaling a whopping $3.5 billion by the end of 2016.

However, as always, every coin has two faces; so is the case with real estate investing too. There is a downside to every positive aspect of realty investing. In the end, it is up to the investor’s wisdom to take his call based on his research and findings. Let us discuss the pros and the cons of real estate investing:

 Pros

It is a tangible asset

Unlike stocks and bonds, real estate is a substantial investment. You can touch and feel your asset as it is made up of real brick and mortar. It instills a sense of safety and accomplishment to the investor. Most of the other investments are limited to our computer screens.

Great source of passive income

No matter if you are in the rental business, or else, buy or sell the business; real estate provides a steady and robust revenue stream. Besides, the return on investment is the biggest question that needs to be effectively tackled, when it comes to making an investment. Real estate investment is rather assuring when it comes to generating a positive ROI.

An inevitable need

Profits are earned when you serve a need. More urgent and important the need will be, higher would be the chances of the investor being successful. Real estate is one of the most basic needs of human species. Therefore, no matter if the global economy is facing its lowest ever; real estate is always going to be in demand.

 Cons

Maintenance

Real estate will need to get maintained and monitored. You never know when the water pipes break, or the lift will go out of service. Other issues are security, depression, and taxes. There are numerous tax bills that rise behind every property like, water tax, property tax, income tax, etc. Handling these many things is not possible single-handedly. And, that brings another expense in the form of hiring resources for doing these unavoidable chores.

Liquidity Issue

Liquifying stocks and bonds are a matter of not more than a couple of minutes. The moment an emergency knocks your door, you can take an action the very next moment. However, the scene with real investments in such cases is just opposite. Trying to sell a property in haste will earn you the low income.

Unlimited Liabilities

When you have a property it brings with it hassles a lot of paperwork, insurance, maintenance fee, managing local regulations and taxes, communicating with the agents, and finding the right tenant for you. In addition to that, you are unaware what kinds of activities are being carried out inside your property by your tenant.

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This article is written by the Crowdfunders Editorial Team. In Asia, Crowdfunders.Asia is a leading portal on providing news related to crowdfunding, start-up, property and business. It is operated byCoAssets.com. CoAssets is South East Asia’s first listed and largest real estate crowdfunding platform. If you have any Crowdfunding news or stories to share,[email protected]

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