Many times one may have heard the question- Is real estate good or bad? Real estate has always been a good investment plan. This is because if one buys a property and rent it; this can serve as a life long income. Hence, one can earn without much hustle and bustle. On the other hand, real estate has shown its evil face in the recent times of economic slowdown. So, what is real estate all about?
Real estate is all about gamble, its advantages and disadvantages. If it pays off one can get rich instantly by selling off property at high rates than its cost price. If the real estate prices go down then the gamble may ruin you. Many people have made lots of money through real estate investment. The gamble involves purchase of property in a good area with potential development prospects. If the neighborhoods are well developed, then there is every possibility of the property price to shoot up after sometime. However one has to wait for sometime for this profit.
Real estate properties have a natural value to it. Hence, real estate investments are always better than stock investments. Stock prices go up and down everyday. Many people have made lots of money in stock market by clever buying. However this is not a sure shot thing. A stock can lose 99% of its value but a property can never lose 99% of its value.
On the other hand, if one buys a property and fails to make mortgage payments then one can lose the property as well as damage one’s credit. Real estate renting depends a lot on other people. If one rents out the home and if the person fails to pay then you may lose your profits and find new people quickly. Real estate costs a lot in maintenance of the property as well. Hence, profits can be reduced.
Real estate was always seen as going up. However, due to economic slowdown there was a reality check. Due to slowdown, people started losing their jobs and were unable to make house payments. People who bought too much property found themselves in foreclosure. As real estate finance was easily accessible, people were unable to repay it. Suddenly, real estate investments were considered a bad option.
Hence, real estate is a gamble and one may see a real estate boom after the economy recovery.
