HomeBlogKNOWLEDGEReal Estate Is Not Just Traditionally Approved But Also Safer For Young Investors

Real Estate Is Not Just Traditionally Approved But Also Safer For Young Investors

When it comes to investment, high-risk ventures to volatile stocks or cryptocurrencies can turn a person’s monetary hope into a nightmare, no matter how lucrative an opportunity they may come off as from a bird’s eye point of view. And most of it is due to their unpredictable fluctuations. It is impossible to speculate on the return and achieve financial stability with these kinds of investments. Fortunately, there is always a more reliable way to grow wealth, especially for young investors.

Yes, Real Estate investments. For newcomers, investing in real estate or property might be the most trusted option. Unlike volatile assets, real estate investment is safe, as it offers a trustable asset that lays the foundation for a steady source of financial flow. In this blog, we explore the key reasons why Real estate is safe for beginners and how they secure their future with it.

Understanding High-Risk Investments:

High-risk Investments are characterised by their peak volatility and their potential for significant loss. They include mini-bonds, volatile stocks, and crypto assets with false promises of growth in no time.

  • High Volatile Stocks: These stocks experience extreme price swings in a shorter period. For example, technology and biotech stocks often see fluctuations of 15-20% annually, compared with the broader S&P 500 Index’s 10-12%.
  • Cryptocurrencies: Emerging digital currencies like Bitcoin & Ethereum are subject to serious inconsistency. According to recent data by CoinMarketCap, Bitcoin’s price dropped  from $45,000 to over $20,000, in 2 years reflecting its unstable nature.

Challenges they come with: 

High-risk investments always come with greater challenges. Some of them are discussed below:

  • Market Volatility: Risky investments are prone to severe price changes. The VIX Index, a measure of market volatility, often spikes during economic uncertainty.
  • High Chances for Loss: The risk of significant losses is at its best. For example, cryptocurrencies have seen value drops of 80-90%.
  • Speculative Nature: These investments are driven by speculation rather than intrinsic value, making their future returns hard to predict.
  • Lack of Tangible Value: Unlike real estate, high-risk assets like cryptocurrencies and volatile stocks lack physical presence, contributing to their instability.

Why and How is Real Estate Safe For Beginners?

Investment in Real estate at an early stage can leave you with a long term passive wealth source. It is historically proven by our forefathers to have built sustainable financial growth over time. In the current ups and downs of the market, property investment still stands tall as a secure option for millennials and if we talk about the scenario in the coming decade for the Gen Z as well. Here are some top reasons why real estate has always been and still is a reliable choice for beginners:

  1. Tangible Asset: Unlike digital stocks and crypto, Real estate are physical, tangible assets responsible for retaining core values. Unlike high-risk investments which can lose their value instantly, purchasing a plot or residence guarantees genuine security for beginners. 
  2. Stable Income Potential: Ownership of a plot offers the benefits of a steady rental business. Whether it’s a residential complex or a commercial property, monthly earnings are assured and predictable. In India, rental yields for residential properties range from 2-4%, while commercial properties offer 8-11%. The stability is unreal compared with stocks or cryptocurrencies.
  3. Appreciation Over Time: Real estate investments tend to compound values in the long run. Property prices generally increase despite occasional downturns in the Real Estate industry. Metropolitan cities like Mumbai, Delhi, and Hyderabad have seen an explosion in real estate value over the last two decades.
  4. Lower Volatility Rate: Like other investments, the Real Estate market also fluctuates all the time.  However, they do it at a slower pace and predictable rate offering ample time to make necessary decisions. This again highlights how safe real estate is for beginners who feel discomfort with dramatic swings of high risks.
  5. Leverage and Financing: According to a recent study, leveraging real estate increases returns significantly without adding substantial risk. With encouraging options like mortgaging, investors can purchase property without paying the full amount upfront. This directly assists beginners to enter the market with small capital while still benefiting from the property.

Additional Flexibility that Real Estate Investors Enjoy

Alongside safety and security, Real Estate also offers a range of additional benefits for beginners. Here are some extra benefits that make property investment a real smart choice.

Diversified Portfolio: The inclusion of Real estate in one’s portfolio adds an integral layer of diversification. It helps reduce risk by spreading investment across different asset classes, shielding major losses in a particular area. The stability allows buyers to experiment with volatile investments without taking stress.

Control and Management: Real  Estate Investors are always flexible and can change their investment strategy whenever needed. It allows the owner to be the boss by providing full authority. They can make decisions directly impact their returns, such as improving property value through renovations, selecting tenants, or increasing rent. This management doesn’t comply with high risks, where the market drives the outcome.

Tax Benefits: Investing in real estate comes with tax advantages that help investors reduce their taxable income. Deductions such as mortgage interest, property depreciation, and maintenance expenses can lower tax liability, effectively increasing owners’ overall return.

How Should Young Investors Expose themselves to the Vast and Ever-Growing Real Estate Market

If you have just started investing, initially Real estate may seem overwhelming or complex. But with curated methods, it is simple and rewarding. Here’s how beginners can start investing in real estate effectively:

  • Education and Research: Research and education are the primordial practices before kick starting something new. Similarly in Real Estate, beginners must understand market trends to succeed in this industry. The knowledge will guide you to make informed decisions and avoid pitfalls effortlessly.
  • Suitable Property Hunt: Evaluating potential properties based on factors such as location, expected rental income, future appreciation, and maintenance costs is crucial for gaining the expected ROI.
  • Professional Collaborations: Real estate agents, property managers, and financial advisors can provide valuable insights to beginners to steal the best deals and manage investments. Collaborations with experts can greatly reduce your risk as you navigate the complexities of real estate.

Final Thoughts

Today, Real estate investment is the most lucrative and safest asset to bet your hard-earned money on, especially if you are a novice. If you are willing to dig deep into the commercial real estate industry, you should take advice from experienced industry experts.

We at PropertySouk specialise in guiding investors through the complications of India’s commercial real estate market. Whether it’s your first investment or your fifth, our team will provide you with professional and personalised advice to help you stay updated about the best possible investment.

Property Souk excels in retaining its client’s trust and assists in all the ways possible to build a profitable portfolio that aligns with financial goals. If you’re ready to unlock the potential of commercial real estate and ensure long-term financial success, Property Souk is here to guide you every step of the way. Reach out today and take the first step toward a secure, lucrative investment that will pave the way for a more stable future.

Disclaimer: The content provided on this blog/Website is for general informational purposes only. We do not offer any specific advice or recommendations. The information presented here should not be considered as professional advice or a substitute for professional consultation. Always seek the guidance of a qualified expert with any questions you may have regarding your specific situation. The opinions and views expressed in the blog/ Website are those of the authors and do not necessarily reflect the official policy or position of Property Souk


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