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.