Is real estate a good investment? Real estate investment can be a great edge against inflation and is almost guaranteed appreciation. There are also certain tax advantages to investing in property, including condominiums and apartment buildings.
Real estate has always been looked upon as a great edge to inflation. It doesn't suffer the ups and downs of daily economic trends. It tends to be more of a long term investment, and so a lot of people who have other portfolios of investments will make real estate part of their portfolio because of the stability that it will add. It may not be huge gains over the short run, but it always moves in the right direction and in the longer run, real estate always turns out to be a great investment. Tax policy used to be very favorable real estate investments, but now the tax policy is less favorable.
A big reason for real estate investment now is long term appreciation. Real estate has always done extremely well in that run. Well-selected properties that have problems can be renovated, they can be changed in use to different types of properties. You see that with warehouses turning into large apartment buildings, etc., and sold either as condominiums or as apartment buildings, for example.
There are more short-term reasons for investing in real estate; that would be the short-term gain. You can buy into whole properties and they go up in value. When appropriately handled, they continue to be good solid investments for many, many years. There is the development side of real estate where you may buy a piece of land and find the best use for that property. Then, you develop something that meets that requirement either to keep or to sell. There are a lot of reasons for investing in real estate. It is considered a high-risk investment, but the long-term returns are always quite substantial, and that's why people do it. It's a scary moment when you do it, but it usually works out.
