Investing in land, housing, and commercial spaces is a solid asset in the portfolio of a discerning investor. There are a number of factors that make property or real estate attractive to investors. It is a traditional method of investment and investors usually have a strong belief in its merits.
Investments in property are seen as low-risk investments. The traditional notion is that if a property’s title is held in an investor’s name, the risk factors are considerably lower. Also, property prices are much more stable when compared to stock market investments. The major risk factors for real estate investments are a sudden decline in a nation’s economy, natural calamities like fire and earthquakes, and unpredictable situations such as emergencies, war, etc. However, some can be insured against these, thus mitigating the risk factor to a great extent.
Unlike stocks, real estate investments do not require a regular review. The growth or fall in property prices is usually gradual, not sudden. This makes it easy for the investor to keep regular tracking of his real estate investment value.
Owning real property is a safer alternative than other assets such as large cash holdings or investment in valuable jewelry and art, as those require extensive security arrangements and they are much susceptible to theft. Property generally does not require special security arrangements at additional expense. It is therefore a more secure asset.
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Real estate presents other advantages to the investor. Art Acosta says "Property can be leased, and an investor can then use real estate rental income to supplement his investment portfolio with other assets.' There are also significant tax benefits in most states when owning real estate.