Compelling Reasons Why You Should Invest in Real Estate
By Lloyd Segal , President , Los Angeles County Real Estate Investors Association
If you ’ re considering investing in real estate , looked it up on the internet , read about it in books , attended some workshops , and perhaps asked a friend or two , you already know that you should no longer wait and get started today . But if you ’ re still struggling to figure out why you should invest , this article will highlight some of the most compelling reasons in the hopes of addressing your concerns and finalizing your thoughts about venturing into this brave new world .
1 . Appreciation
Over time , the value of real estate rises ( sometimes fast , sometimes slow ). This is due to “ supply and demand ,” a fundamental economic concept , which I ’ ll address separately . With respect to “ demand ,” our population is steadily increasing and does not appear to be slowing down any time soon . And until further notice , people prefer to live indoors . As a result , more and more people looking for a place to reside means more demand for housing . So the demand for real estate is gradually increasing . And , according to basic economics , as demand increases , prices rise in response . With respect to “ supply ,” they are simply not making any more land . So land increases in value with limited supply . Similarly , they ’ re not building enough houses on that land to meet demand . So the value of what already exists increases . Plus , improvements in the surrounding region also increases value . As a result , the value of real estate appreciates over time .
2 . Control
When it comes to real estate , once you ' ve paid for the property and met all legal criteria , you own the asset outright and have practically unlimited control over it . You may immediately alter the asset ' s value , improve the property , increase cash flow , reduce expenses , and increase the rents . So unlike stocks and bonds , you are not at the mercy of the market or corporate executives . You are in control and can increase the value of your asset .
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