5 Reasons Why Real Estate Is a Great Investment

As one of the stars of “Million Dollar Listing Los Angeles,” James Harris knows a thing or two about making money in real estate.

A spec home is offered for sale in a housing development in Wauconda, Illinois on March 16, 2011. (Scott Olson/Getty Images)

By James Harris

Real estate is a great investment for many reasons. You can enjoy an excellent rate of returns, amazing tax advantages, and leverage real estate to build your wealth. Here are the top five reasons why real estate is a great investment.

Real Estate Provides Better Returns Than the Stock Market Without as Much Volatility

Historically in real estate, your risk of loss is minimized by the length of time you hold on to your property. When the market improves, so does the value of your home, and as a result, you build equity. The risk never changes in the stock market and there are numerous factors beyond your control that can negatively impact your investment.

Real estate gives you more control of your investment because your property is a tangible asset that you can leverage to capitalize on numerous revenue streams, while enjoying capital appreciation.

Real Estate Has a High Tangible Asset Value

There will always be value in your land, and value in your home. Other investments can leave you with little to no tangible asset value such as a stock which can dip to zero, or a new car which decreases in value over time. Home owners insurance will protect your investment in real estate, so be sure to get the best policy available so your asset is protected in the worst-case scenario.

Real Estate Values Will Always Increase Over Time

History continues to prove that the longer you hold onto your real estate, the more money you will make. The housing market has always recovered from past bubbles that caused home appreciation to slip, and for those who held on to their investments during those uncertain times, prices have returned to normal, and appreciation is back on track.

Now, real estate investors in the top performing markets are enjoying a windfall. In fact, this past year, every state in the nation had a positive appreciation, and some of my clients in the Los Angeles market have made millions of dollars in less than a year from flipping.

A For Sale sign is displayed in Falls Church, Virginia, on April 2, 2022. (STEFANI REYNOLDS/AFP via Getty Images)

An Investment in Real Estate Can Also Diversify Your Portfolio

If you’ve ever spoken to a financial planner about investing, then you are very aware of the importance of diversification. When you diversify your portfolio, you spread out the risk. Real estate will always serve as a safe tangible asset to mitigate the risk in your portfolio. Many have amassed wealth by solely investing in real estate.

Last but Not Least, Real Estate Investing Comes with Numerous Tax Benefits

You can get tax deductions on mortgage interest, cash flow from investment properties, operating expenses and costs, property taxes, insurance, and depreciation (even if the property gains value) and other benefits.

The luxury supertall condo tower, 432 Park Avenue, stands in Midtown Manhattan in New York City on May 16, 2022. (Spencer Platt/Getty Images)

An investment in real estate is not only a safe financial investment, it is also an investment that can provide years of fun, happiness, and priceless memories that will last a lifetime.

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