Real estate is generally a great investment option. It can generate ongoing passive income and can be a good long-term investment if the value increases over time. You may even use it as a part of your overall strategy to begin building wealth .
When you buy real estate, you acquire physical land or property. Most real estate investors make money by collecting rents (which can provide a steady income stream) and through appreciation, as the property's value goes up. Also, since real estate can be leveraged, it's possible to expand your holdings even if you can't afford to pay cash outright. For many prospective investors, real estate is appealing because it is a tangible asset that can be controlled, with the added benefit of diversification.
Real estate that generates monthly rental income can increase with inflation even in a rent-controlled area, which offers an additional advantage. Another consideration is taxes after selling the investment. Selling stocks typically results in capital gains taxes. Real estate capital gains can be deferred if another property is purchased after the sale.
Real estate investors have the ability to gain leverage on their capital and take advantage of substantial tax benefits. Although real estate is not nearly as liquid as the stock market, the long-term cash flow provides passive income and the promise of appreciation.
Despite this, it's important to consider the amount of money that goes into real estate investments. You need to have the ability to secure a down payment and financing if you aren't making all-cash deals.