Pros and Cons of Real Estate Investing:
- Pros of real estate investing
- Cons of real estate investing
The followings are the pros and cons of real estate investing.
Pros of real estate investing
- Real Estate plays an important role in the economy of Pakistan. In addition, it contributes 60-70% to the economy of Pakistan.
- The price of real estate increases over time. If you choose a property in a prime location its value will increase with time. If a property is purchased below the market price after some time it can give a valuable return.
- Real estate is a source of continuous cash flow. If an investor owns multiple properties he can earn passive income from rental properties.
- Real estate requires less investment as compared to other businesses.
- Real estate is a hedge against inflation. Inflation almost affects everything but real estate grows faster than inflation.
- Lastly one of the major benefits of purchasing a real estate property is that you control your assets. No other person can claim his rights to your property.
Cons of real estate investing:
- Real Estate requires investment. If someone doesn’t have any investment then he can’t start a real estate business. When investing in real estate, it is necessary to evaluate the potential cons carefully. Here’s a link How to Invest in Real Estate to make passive income.
- It is not a get-rich-quick scheme and requires a lot of patience for the prices to go up. Furthermore, long-term planning is needed for real estate investment. If you have an emergency and you want to sell your property it can be difficult for you to sell your property immediately.
- Real estate requires proper maintenance regularly.
- Besides maintenance dealing in real estate requires a lot of time. It requires an effort to get to know the neighborhood where you are going to purchase your plot. The value of a real estate can decline over time. If the political and economic situation of a country is not stable the price of real estate can decline.
- The transaction costs are very high sometimes because if you are going to purchase property through a real estate agent then you have to pay a commission to him. You also have to pay a heavy amount of tax when purchasing a property.
Also Read: How to avoid Property Frauds in Pakistan?