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15 Reasons Why Real Estate is the Best Investment

Dusty Rhodes • May 20, 2024

Investing in real estate can feel like a big decision and one you shouldn’t take lightly, but it’s also one of the best decisions you can make. 


You have many options for using your capital to grow your net worth and save for the future. Here are 15 reasons why real estate is the best investment.


1. It’s a Tangible Asset


Investing money can be scary for investors, especially when you can’t see or touch it, such as investing in stocks or cryptocurrency. On the other hand, you can see, feel, and even control real estate. 


This gives investors greater peace of mind, knowing they can renovate, repair, or even sell the asset but still be in control.


When you sell stocks, for example, you have no control over their value. You are at the mercy of the market price and current demand. While a real estate market determines the property’s value, you can do more to increase the property’s value to earn greater capital gains.


2. Real Estate Provides Cash Flow


Trading your money for an investment is a big deal. When you don’t see anything from it until you sell the asset, it can be frustrating or even cause you to want to sell it just to see your cash again.


When purchased and used as rental properties, real estate provides cash flow. You earn cash from the monthly rent, plus, of course, any profits earned from selling the property. 


While you must factor in vacancies and bad renters, you’ll likely have more consistent cash flow than with other investments, like stocks or ETFs.


3. Real Estate Is a Hedge Against Inflation

When inflation rises, the power of the dollar falls. As prices increase for various goods and services, so does the value of properties and rental prices. 


If you own a rental property, you may be able to charge higher rents when the lease renews or you get new tenants. You’re also better positioned to earn higher profits when you sell the property during inflationary periods because of higher costs.


On the other hand, stocks typically decrease in value because companies often struggle during periods of inflation. Companies must charge higher prices to cover their higher costs, but with consumer spending down during inflation, stock values typically decrease.


4. Real Estate Investors Get Tax Deductions

Real estate investors are often eligible for tax deductions that other investors, like stock or bond investors, don’t get. 


The most common deductions are for depreciation (27.5 years for residential buildings and 39 years for commercial buildings), mortgage interest, maintenance and repairs, property taxes, and travel expenses.


Of course, tax deductions vary depending on the location, how you own the property, and other tax-related scenarios. Always consult your tax advisor to determine how to best file your taxes to take advantage of real estate tax deductions.


5. You Can Leverage Your Investment


Typically, you can only invest as much cash as you have, but real estate allows you to leverage your investment with mortgage financing. 


For example, if you want to purchase a $200,000 home but only have $50,000, you may be able to put the $50,000 down and borrow the rest. This enables you to purchase a home for $200,000 without investing dollar for dollar.


While you can invest on margin with stock investing, it’s a more complicated scenario, and not everyone qualifies. Mortgage financing has more flexibility and is available to many investors.


6. Property Appreciation Is Likely

There are few guarantees in life when it comes to investing. You cannot guarantee or assume that a company’s stock value will increase or that the company will stay in business. 


But you can count on property appreciation if you do your due diligence and invest in an area where property values typically appreciate.


As mentioned, you also have a certain level of control regarding property appreciation, as you can force it by upgrading or renovating the property. Working with a reputable real estate agent can ensure you invest in an area with appreciating values.


7. Real Estate Doesn’t Correlate With the Stock Market


The No. 1 rule in investing is to diversify your portfolio, which means don’t put all your money in one type of investment, such as stocks. Diversifying your portfolio with real estate increases your chances of seeing capital gains, no matter what happens in the market.


This means if the stock market crashes, real estate won’t necessarily follow, ensuring your portfolio isn’t a total loss, even in a challenging market.


8. Real Estate Investing Can Be Hands-Off

If you’re hoping for a hands-off investment, you can invest in real estate passively. Here are a few ways:

  • Purchase a rental property and pay a property management company to handle the day-to-day operations.
  • Invest in real estate investment trusts (REITs), earning a portion of the company’s profits while they purchase and manage properties.
  • Invest in real estate crowdfunding, which is a group investment in real estate, paying you some of the profits according to the amount of your investment.


9. Cash Flow Can Be Predictable


If you invest in the stock market, you cannot predict how much you’ll make. There’s usually no cash flow unless you invest in dividend stocks, and even those aren’t predictable because you don’t know how much profit a company will earn or what dividends they’ll pay.


Real estate allows predictable cash flow because you control how much rent you charge and any other monies you collect. While you can’t predict your capital gains to the dollar, you know how much money you’ll bring in monthly.


10. You Build Equity Over Time


Whether you leverage your investment with a mortgage or pay for the property outright, you build equity by paying down the mortgage and/or the property’s natural appreciation.


Equity is the money you’d earn if you sold the property today. The equity increases your net worth and typically increases each year you own it.


11. You Have Many Options

Real estate investors have numerous options to invest in. We discussed the passive opportunities, including REITs and crowdfunding. If you’re looking for an active real estate investment, your options include:

  • Buy and rent properties to tenants.
  • Purchase commercial properties, renting to businesses.
  • Fix and flip properties, earning a fast profit.


12. Real Estate Investments Provide Security

There’s not much to feel secure about when you invest in stocks. You’re taking a chance on a company, hoping it succeeds and its stock value increases, but it’s a gamble.


When you invest in real estate, you have a tangible, appreciating asset. This provides peace of mind knowing you have this property that, if necessary, you could sell and liquidate your investment, or hold on to it and keep it growing.


13. You Can Borrow Against Real Estate


When you build equity in your real estate investments, you may be eligible to borrow against them. This decreases your property equity but allows you to liquidate a portion of your investment without selling it. 


To liquidate your investment in stocks, you must sell your shares; you can’t borrow against them while still owning them and allowing them to continue appreciating like real estate.


14. Real Estate Investments Can Benefit the Community


Even though you’re likely focusing on yourself and the reasons real estate is the best investment, it’s good for the community, too. 


When you purchase, renovate, and maintain a property, you help the area’s property values. It also provides another viable property for families to use, helping to improve the community.


15. Real Estate Investing Can Be a Business

Stock market investing is simply investing. You don’t get special tax deductions or treatment for it. Real estate investing, though, can be a business that you actively participate in, growing your portfolio and making a living for yourself and your family.


Final Thoughts


These 15 reasons why real estate is the best investment are reason enough to diversify your capital and invest in real estate. 


Whether you’re looking at your first real estate investment or you want to expand your portfolio, there are numerous benefits for doing so, giving you access to equity, cash flow, and a tangible asset that gives you control.




Source: BiggerPockets Blog


Dusty Rhodes Properties is the Best Realtor in Myrtle Beach! We do everything in our power to help you find the home of your dreams. With experience, expertise, and passion, we are the perfect partner for you in Myrtle Beach, South Carolina. We love what we do and it shows. With more than 22 years of experience in the field, we know our industry like the back of our hands. There’s no challenge too big or too small, and we dedicate our utmost energy to every project we take on. We search thousands of the active and new listings from Aynor, Carolina Forest, Conway, Garden City Beach, Longs, Loris, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Pawleys Island, and Surfside Beach real estate listings to find the hottest deals just for you!

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Myrtle Beach OKs extension for halting new long-term rentals near ocean

By Dusty Rhodes • November 18, 2024
Myrtle Beach City Council on Tuesday approved first reading to extend the temporary moratorium established in the spring that halted converting short-term rentals into long-term ones. The original ordinance passed first reading on April 9 and second reading on May 14. It imposed a 270-day halt on “acceptance, review and approval of applications to convert multi-family short-term rental properties to multi-family long-term rental properties within an area spanning from the east or seaward side of Ocean Boulevard to Kings Highway, and from Grand Dunes Boulevard to the point where Ocean Boulevard and Kings Highway intersect near the south city limits,” the ordinance reads. The 270-day halt was set to expire in January, according to the ordinance. The extension adds another 60 days to the moratorium. The council also approved a motion to declare certain vehicles abandoned or derelict in an effort to improve the appearance of both commercial and residential neighborhoods. “This report includes vehicles staff tagged as abandoned or derelict. Council’s approval allows these vehicles to be towed from their private property locations to a tow yard where they may be reclaimed by the current owner upon payment of the applicable towing and storage fees,” the motion reads. “If the vehicles are not claimed by the owner within 30 days of the required notice, then the tow company may sell the vehicle and keep the proceeds as compensation.” All four items on the consent agenda passed, including three grants of $110,262, $84,825 and $300,000. The $110,262 grant comes from the South Carolina Department of Public Safety and is for continuation of Myrtle Beach police’s Project Safe Neighborhoods program. According to the motion, the funds will be used “to support the full-time NIBIN detective dedicated to the acquisition, correlation, analysis, investigation, and prosecution of gun and gun-related crimes.” The $84,825 grant comes from the South Carolina Attorney General for the Violence Against Women Act. Those funds will be used “to support the hiring of a Police Victim Advocate dedicated to immediately responding to the safety needs of victims of violent crime. This position will allow Myrtle Beach police to provide, enhance, and expand its direct services to primary and secondary victims.” The $300,000 grant comes from the South Carolina Department of Alcohol and Other Drug Abuse Services and will allow Myrtle Beach police to establish a Law Enforcement Assisted Diversion (LEAD) program. “LEAD is a pre-booking diversion program that allows law enforcement that allows law enforcement to redirect low-level offenders to community services, including mental health services and drug rehabilitation,” the motion reads. “MBPD will use this funding for two Health Outreach Coordinators and scholarships for participants.” Before the meeting, proclamations were also made recognizing former Horry County Police Chief Joe Hill, who retired last month, as well as Horry County Administrator Steve Gosnell, who will retire in December. Gosnell was awarded the Order of the Palmetto in September.

Ways to Thank Service Members and Veterans

By Dusty Rhodes • November 11, 2024
While any time is a good time to thank military members for their service, some military-related holidays and observances are an especially great time to recognize those who took the oath to serve and protect our country. Looking to show your appreciation for service members and veterans beyond just words? Here are a few ideas. Acts of Service Buy a meal. If you see a service member in uniform or recognize someone is a veteran while dining out, picking up the tab for their meal is a nice gesture – and an even better surprise. Lend a hand. Are you good at carpentry, plumbing, or landscaping? Do you enjoy sewing, cooking, or cleaning? Offer your skills to help a military family in need, especially if a service member is deployed. Using these skills to show your support could ] brighten someone’s day and make life a little easier for military families juggling responsibilities. Volunteer at a VA hospital or veterans’ shelter. Not every veteran has someone checking up on them, so seeing a friendly face, especially during times of struggle, could mean more than you know. VA medical facilities depend on volunteers to help with various services, including visiting patients, running errands, or helping facilitate recreational activities. In addition, serving meals at a veterans’ shelter or donating goods to food pantries and shelters that serve veterans helps ensure basic needs are being cared for. Connect With Veteran Networks Participate in parades and other veteran events. Many cities hold parades and celebration events during military-related holidays, like Memorial Day and Veterans Day. By attending the events, you can show your gratitude in person. Consider joining wreath-laying ceremonies for Memorial Day to honor those who made the ultimate sacrifice, or take your family to one of the many Veterans Day events across the country to show your support. Check-in with military families. If you know someone or have neighbors with a service member in the family who is stationed away from their loved ones, take time to check in and let them know you’re there to help if needed. The simple gesture will help the family know they have support and give the service member more peace of mind, knowing there is someone nearby to look in on their family members . Listen to veterans’ stories. If you meet a veteran, take time to connect and learn more about their time in service. You’ll likely be amazed and inspired by their stories. If you’re a company or organization seeking a veteran speaker for an event or fundraiser, programs like Wounded Warrior Project’s Warriors Speak® give warriors and military caregivers a platform to share their stories and raise awareness of the needs of injured veterans. Donate to a veterans’ charity. One of the easiest and most impactful ways to honor service members and veterans is to donate to a veterans service organization (VSO). Wounded Warrior Project is dedicated to serving veterans and their families by providing a holistic approach to care, including mental wellness , physical health and wellness , peer support , financial education , and much more. Supporting VSOs is a meaningful way to empower veterans to thrive and live their lives to the fullest. Send a Military Care Package Another way to thank active-duty service members is to send a military care package. Even during peacetime, there are things service members stationed in the U.S. and abroad can use and enjoy. It also doesn’t hurt to get an unexpected gift and reminder of home when you’re away from family. Here are some ideas on what to send in a military care package: Toiletries: Items like deodorant, soap, shampoo, and razors are always needed and appreciated. Costs for these little things can add up, and they are necessary, whether in the field, deployed overseas, or even at home. Deck of cards, puzzles, books. Even with all our modern technology, a deck of playing cards is a classic care package item. Books, puzzles, and games can also be a fun way to pass the time on deployment, in the field (if allowed), or at the barracks. Feminine-hygiene products. Women are the fastest-growing demographic of veterans, and more and more are serving in the Armed Forces. Sending items specifically to women warriors shows them they’re being seen for their service and helps provide much-needed supplies that are often an extra expense for servicewomen. Snacks. Consider portable snacks like beef jerky, trail mix, or energy bars for warriors in combat zones. For those in basic training or stationed away from home, send local treats or popular snacks that are easy to share. Add comfort items like soup cups, instant coffee, flavored drink mixes, or cookies. A card or letter. It’s always nice to hear that what you’re doing is appreciated. When sending a note or card in a military care package, include how important the service member’s sacrifice is to you why it matters. Reading these words of support and appreciation can go a long way in brightening someone’s day. Regardless of how you decide to show your appreciation to service members and veterans, we must never forget the sacrifice members of the U.S. Armed Forces are willing to make for us. Find out other ways you can help wounded veterans. Contact: — Paris Moulden, Public Relations, pmoulden@woundedwarriorproject.org, 904.570.7910 About Wounded Warrior Project Since 2003, Wounded Warrior Project® (WWP) has been meeting the growing needs of warriors, their families, and caregivers — helping them achieve their highest ambition. Learn more . 

Why Home Sales Historically Bounce Back After Presidential Elections

By Dusty Rhodes • October 28, 2024
With the 2024 Presidential election fast approaching, you might be wondering what impact, if any, it’s having on the housing market. Let’s break it down. Election Years Bring a Temporary Slowdown In any given year, home sales slow down slightly in the fall. It’s a typical, seasonal trend. However, according to data from BTIG , in election years there’s usually a slightly larger dip in home sales in the month leading up to Election Day ( see graph below ): 
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