Real estate .. Is it the best way to build wealth?‎

23% of Americans believe that real estate is the best way to build wealth, but only 12% bought in 2022, according to a survey conducted by CNBC, and this makes it the most popular way to build potential wealth, especially since 193 billionaires have made their fortunes from real estate. That equates to 7% of the world’s billionaires list, followed by investing in stocks (16%), starting your own business (15%) and getting a second job or side business (12%).

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Why is real estate more popular than stocks in theory, but not in practice? So what’s stopping Americans from investing the way they want? Financial experts say the biggest factor is cost. Nicholas Ponyo, a certified financial planner in Downingtown, Pennsylvania, puts it down to the cost of investing in real estate, “meaning you need to pay cash on the house, or mortgage the property not to mention the property repair and annual maintenance which costs you money.

While news reports indicate that investing in real estate has several advantages, including:

Portfolio diversification:

Portfolio diversification is essential because putting all your eggs in one basket can lead to a complete loss in the blink of an eye. But when you diversify some investments into the stock market, others into bonds or ETFs, and some into real estate, you increase your chances of making higher profits and lower losses.

  Many people avoid real estate investments because they think that they need a lot of money, but investing in real estate has advantages, including providing regular cash flow. If you buy real estate and own it, you can earn monthly cash flow from renting it, and this increases the profits of owning real estate because you do not It is based only on appreciation but on monthly rental income.

Financial security:

There is not much to make you feel safe when investing in the market. But, as the COVID-19 pandemic showed in 2020, accelerated change can happen. When you invest in real estate for the long term, you know you have an asset that appreciates. It may go through some difficulties, losing some value along the way, but it usually makes gains if you hold it long enough.

Investment methods:

There are many ways to invest in real estate If buying and renting real estate is too stressful for you, there are many other ways to invest in real estate, including: buying an undervalued property, fixing it up and selling it again.

To be an intermediary dealer between sellers who want to sell their properties due to need, and offer it back to a network of buyers. Also, you can buy a property with 1 to 4 units, live in one unit, and rent out the others using the cash flow from the property rental to cover your mortgage.

  According to the Economic Times newspaper, real estate has the potential to generate very high returns in the long run. It can provide a steady cash flow and has many tax advantages. The newspaper referred to some of the many advantages offered by real estate over other investment categories. Among them is that it provides a stable source of income, especially since the demand for housing rental is on the rise. Demand for rental housing in India grew by 29.4% qoq and 84.4% yoy, while average rents increased by 8.4% qoq in the second quarter of 2022. This demand is expected to increase in the coming years.

Real estate is also an effective tool against the loss of capital if the purchasing power of a currency decreases due to inflation or other macroeconomic trends.

It can also provide liquidity by using the property as collateral for loans.