Like any type of investment, investing in housing has its pros and cons. Let’s take a closer look at them.
Pros:
- Passive income. Renting out a property brings in a stable income that can be used as an additional source of income
- Protection from inflation. The value of real estate usually increases over time, protecting your savings from depreciation
- Increase in value. Reselling properties with a good location or after renovation can significantly increase your profit
- Low risks. Compared to other investment instruments, real estate has a lower level of risk, especially when insuring against force majeure
Cons:
- High down payment. This applies to buying a home with a mortgage, where the down payment can be significant
- Long payback period. Payback on a home when renting out can take years, which requires patience and long-term planning
- Maintenance costs. Utilities, taxes, repairs – all these costs fall on the shoulders of the investor and can significantly reduce net profit
