Even in the wake of the Great Recession, the real estate market remains one of the absolute best investments that a savvy investor can make with his or her expendable income.
Although the news and the paid talking heads were full of (and are still full of) information about how the price of housing is down from their 1990s – turn of the century highs, the savvy investor knows that these prices were inflated in the first place. Real estate can be off from the highs of the housing bubble and still remain a fully justifiable, completely profitable investment.
As a matter of fact, the Great Recession may have actually improved the profitability of real estate over the long term. As recessions historically tend to consolidate resources, anyone with cash on hand to purchase properties stands to make a great deal for themselves when the economy returns to normal and the middle class is set to begin purchasing real estate again (because they will have to purchase it from you).
There are many reasons aside from the short-term financial gains for the savvy investor to choose real estate. Some of these reasons will be detailed below.
One – Real estate retains its value in terms of utility.
Even if the real estate market fluctuates in the short term, assuming that you do not fall far behind on your mortgage payments, your real estate is still good in terms of rental income or just having a place to stay. People never talk about the utility value of an asset and how it adds to the comfort level of an investor, allowing him or her to make better decisions on other investments.
Two – Real estate will become more valuable as the population of the world increases.
The population of the world is expected to add more than 2 billion people in the next 50 years. Real estate as a generational wealth gathering option becomes a real possibility in this scenario.
The amount of land on the Earth is not increasing. As land becomes more and more needed, the price of real estate will go up because of the basic supply vs. demand Economics 101 argument.
Three – Mortgage loan lenders will become less and less likely to give mortgage loans to people who do not already have a history of successfully purchasing properties.
If you want to have all the credit that you could ever dream of, make sure that you are invested in the real estate market. This opens up lines of credit that people who are not homeowners will never have access to. If you need money, you can take out a line of credit on your real estate directly or use the property as leverage to prove your creditworthiness in an outside line of credit.
This article is brought to you by Holly Downes
Originally posted 2015-03-17 00:51:54.