Is it worth investing in real estate? This is the question many people are asking themselves right now. This year, banks are drastically reducing interest rates, so putting money into a savings account or putting it on deposit becomes unprofitable. So what to do with the cash? Buying an apartment seems to be a good idea in this situation. Let’s check what are the benefits of this solution.
The pandemic has caused great confusion both in our personal lives and in the economy. Overnight we found ourselves in a new reality. The freezing of many industries has created a recession that we must face. There is a risk that previously accumulated savings will lose value. For this reason, you should find an effective way to multiply your profits in the future. The bad streak will end one day. Now you need to think about the future and invest your money safely
5 benefits of investing in real estate
- Ability to choose your own entrepreneurial path
When buying a property, you can choose from the following options:
- apartment for renovation,
- building plot,
- office space,
- agricultural land.
An apartment is an ideal solution for people who think about renting. At the beginning it is worth to define the target group and choose the best location and adjust the standard of furnishing. Furnished premises can be rented to e.g. students, working people, families or foreigners who came to work in our country. Some people also decide to be tourists. Thanks to this, the monthly household budget will increase by several hundred PLN.
You can also buy an apartment to renovate and furnish it according to your own idea, and then sell it. Its value will significantly increase. In this way you can relatively quickly earn at least several tens of thousands.
- Minimal risk of decline
Analyzing statistical data from recent years, very similar trends can be observed. Real estate brings a certain profit. Although there has been a sine wave on the graphs since the last economic crisis, which took place in 2009, after small drops there has always been a rise in prices. So just be patient and trust the statistics. One thing is certain, investment in real estate gives more security than the stock market.
- High demand for apartments
There is still not enough housing units in relation to the real demand. COVID-19 brought a slight slump in the real estate market. People renting apartments were forced to lower their rent and in some cases had to accept the decision to move out and lost income. Slowly, however, things will return to normal. Before long, students will be back in college and people will be traveling more. It may be worth lowering the rental price a bit at this point to get tenants. Earning even 200-300 PLN is still more than the interest rate on a savings account, which is close to zero
- Passive income
Owning several apartments for rent means income of several thousand a month, which does not require much effort. Attractive location and appropriate standard of the apartment do not require much time from the owner. It is enough to collect rent and pay bills. When buying an apartment, it is worth choosing one that is located close to your place of residence. This way you can additionally save time and money on fuel.
- Lower taxes
Investing in real estate is a great idea for entrepreneurs. Buying apartments will allow them to expand their business. Tax laws allow depreciation of costs, i.e. reduction of the tax base. As a result, the owner of the apartment may be exempt from paying income tax on the income earned from rent.
Advantages of investing in real estate – summary
There is no doubt about the profitability of investing money in apartments for rent. It is a profitable way to multiply profits, which first of all requires patience. The return on investment is long but certain. What is important, you can decide to sell the apartment at any time. Compared to deposits, there is no grace period. The profit from the sale and the amount from the rental will definitely be higher than the purchase price.