Mark Tencaten: - Pros and Cons of Investment in Property or Real Estate

by Mark Tencaten Mark Tencaten - Co-Founder and owner at NGS Group

Investment in property or real estate is an eye candy for those who want to get rich in no time. But the bad news is only a handful are fortunate to realize their dream of making it big in the real estate market as most investors (especially the impatient ones) end up with empty bank accounts or a pile of debt.

Like any other type of investment, investment in property or real estate involves certain risks. Therefore, it’s important to weigh the pros and cons before making investment in property or real estate.

Pros of Investment in Property or Real Estate

Pro 1: Availability of Finance

The best thing about investment in property or real estate is that it allows you to use other people’s money (OPM). Unlike stocks and bonds, investment in property allows you to borrow money, or finance a property or multiple properties for a part of the total cost.

Pro 2: Immense Growth Potential

Unlike vehicles that are depreciating assets, home values tend to rise over time making it an appreciating asset. However, appreciating potential of a property is directly linked to the location of the property. While some properties may double up in a couple of years, for some it can remain stagnant for years. Therefore, it is important you seek advice from real estate investment experts like Mark Tencaten before investing in property or real estate.

Pro 3: Tax Benefits on Rental Property

Another reason for you to show interest in making investment in property and real estate is tax benefits you get. There are a number of tax benefits that you can enjoy being a rental property owner, including:

· Repair and maintenance costs

· Mortgage interest

· Insurance

· Utilities

· Property management expenses

· Rental property losses

· Depreciation

· Capital expenditures

You can reach out to Mark Tencaten to know more about the tax benefits associated with investment in property or real estate.

Pro 4: Better Stability & Control

While stock market investments are subject to day-to-day fluctuations, the real estate market comes up with comparatively lesser fluctuations and minimal risk of suffering losses. However, like in stock market you need to have stable funds to remain invested for longer periods to enjoy better appreciation values.

Cons of Investing in Property or Real Estate

Like other investments, investment in property or real estate involves financial risks. As suggested by Mark Tencaten, consider the following cons of investing in property before you make your final decision.

Requirement of Hefty Capital

You can’t sustain in real estate market for long if you don’t have the leverage to invest hefty amounts upfront and stay invested for longer time, sometimes for years.

Even if you are thinking of finance options, you need enough money for at least down payment (that amounts to 20 percent of the purchase price) as well as for initial repairs, closing costs and updates to the property.

Risk of Market Crisis and Natural Calamities

Investment in real estate is also subject to market crisis like COVID-19 in the present case that can affect customers’ purchasing behaviors for many years to come. At the same time, natural calamities, especially in areas prone to floods, earthquakes and others, is another risk factor to consider before investing in property or estate However, these risks can be taken care of by right judgment and pre-planning. That’s where Mark Tencaten can help you.

Make sure you consider expert advice before putting your hard earned money in real estate.