Investing your money in real estate is certainly a safe and rewarding venture. If you are looking for investing your money wisely, simply purchase your own home. This will not only help you to get tax rebates, but the value of your real estate property will continue to soar over the years. If you take a close look at the real estate market, you will be surprised to learn that the prices of many homes have zoomed during the last few years. In fact, the price of real estate property have risen so high and rapidly in several parts of the country that it often strikes a chord with people as to what occurred to the stock market after it touched the zenith in 2000. Owing your own home has several advantages. While it is much less expensive than renting a house, owing a home also enables you to create an enduring asset in the traditional manner. Above all, when you own your home, it really gives a great feeling - a sense of pride and contentment.
However, the greatest disadvantage of owning a home is that all real estate properties are illiquid assets and cannot be converted to cash easily. In other words, when you own a home, you cannot sell it promptly to raise cash as can be done when you own a stock or purchase a mutual fund. Another shortcoming of buying a home is that you will be required to make mortgage payments for it every month. In the event of failing to make the payments regularly, the bank that had provided you with an advance payment against the security of the real estate may even try to occupy your home. In addition, owning a home makes it essential for you to undertake additional expenses such as property taxes, home owner's indemnity as well as the interest on the loan taken from the bank. However, in spite of these negatives, investing in real estate or owning a home is definitely a valuable financial objective, although not all will agree to this. For instance, compared to owning a home, renting a house is more convenient for many people. Besides, if you don't invest in real estate or purchase your own home, you don't need to take any loan and, instead, are able to spend the surplus money you are having with you in investing in stocks or purchasing mutual funds or bonds.
There are several people who acquire real estate as an investment. They may purchase any real estate property, including single-family home, condominium or even town house and retain them for some time. And when they find the real estate prices soaring, these investors sell their property at high prices or rent them out. Like in the case of investing in stock markets, one should never purchase real estate before undertaking a meticulous study of the real estate market.
If you are looking for an option other than investing in real estate, you may very well endow in REIT or Real Estate Investment Trust. REIT is an openly traded firm and its stocks can be purchased as well as sold on any of the stock exchanges. Such companies purchase and deal with numerous and a variety of real estate properties. In case you are not willing to take the time to purchase the stocks issued by these firms, you are always free to acquire REIT mutual funds.
It may be mentioned here that while purchasing real estate is an illiquid investment, the REIT endowments offer the benefit of liquidity. You are free to convert the stocks and mutual funds issued by the REIT firms into cash at any given time. Moreover, investing in REIT also enables you to purchase and sell real estate without taking the trouble of undertaking an extensive research on the real estate market. However, like in any other investment, putting your money in REIT stocks and mutual funds too has its shortcomings. It is possible that the firm or the fund manager will make shabby real estate investments resulting to a fall in the value of the REIT stocks and mutual funds. In this case, the investor stands to suffer a financial loss.