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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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The Secret To Selling This Spring: Start the Prep Work Now

By Dusty Rhodes • February 17, 2025
Spring is the busiest season in the housing market. It’s the time of year when buyers are most active – that means it’s when homes sell faster and for top dollar. If you’ve already got a move on your mind, why not list this spring and take advantage of the added buyer demand ? Since spring is just around the corner, now’s the time to start getting your house market-ready. You’ve got just over a month to do the prep work. And while that may sound like a decent amount of time, it’s going to go by quickly. And you won’t want to rush through this important task – especially this year. The Right Repairs Will Matter More This Spring Right now, two things are true. There are more homes on the market than there have been in years. And buyers are being extra selective. That combination means you need to invest some time and effort in making strategic repairs . And many homeowners already have a jump on this work. In the 2025 Outlook for Home Remodeling , Carlos Martin, Director of the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University , explains : “. . . homeowners are slowly but surely expanding the pace and scope of projects compared to the last couple years.” And the most common projects they’re tackling are replacing water heaters, HVAC units, and flooring. Energy efficiency is a key consideration too, based on home improvement data from the Census. What To Prioritize as You Plan Ahead But just because that’s what other homeowners are doing, it doesn’t mean that’s what you have to tackle. Think about what you’d want to see if you were a buyer. Focus on quick wins that are easy to knock out with the time you have – but, don’t ignore key repairs, especially ones you think could turn off buyers. While big-ticket items like replacing an old roof or outdated flooring may seem daunting, they can pay off – especially if you focus on projects with the best return on investment (ROI). An agent’s expertise is key in narrowing down your list to what’s actually worth it. They know what buyers in your area want and they also have data like this report from Zonda to guide you on which updates have the best ROI ( see green in the graph below ):

41 housing markets where inventory just tipped in favor of buyers

By Dusty Rhodes • February 10, 2025
Among the nation’s 200 largest housing markets, these 41 metro areas now have active inventory at or above 2019 pre-pandemic levels. While homebuyers and home sellers still see headlines about the housing market being a seller’s market and national home prices reaching all-time highs, a deeper look reveals that several regional housing markets have shifted, giving homebuyers some power. During the pandemic housing boom, from summer 2020 to spring 2022, the number of active homes for sale in most housing markets plummeted as homebuyer demand quickly absorbed almost everything that came up for sale. Fast-forward to the current housing market, and the places where active inventory has rebounded to 2019 levels (due to strained affordability suppressing buyer demand) are now the very places where homebuyers hold the most power. At the end of January 2025, national active inventory for sale was still 25% below January 2019 levels. However, more and more regional markets are surpassing that threshold. Among the nation’s 200 largest metro area housing markets, 41 markets ended January 2025 with more active homes for sale than they had in pre-pandemic January 2019. These are the places where homebuyers will be able to find the most leverage or market balance in 2025.

Selling vs. Renting Out Your House: Which Is Right for You?

By Dusty Rhodes • February 3, 2025
Leaving your current house and moving to another one gives you a few options. While most homeowners choose to sell outright, many opt to keep their old home and rent it out instead. This decision can be influenced by several factors: a strong rental market in your area, the advantage of a low current mortgage rate, or challenges in selling the house at the desired price. If you’re wondering whether to sell your house or rent it out, there are a few things to consider. Key Takeaways The answer depends on your circumstances, your housing situation, and your current finances. Selling your house may be the right option if you need the proceeds to purchase your next home or could make a profit. Renting out your house may be the right choice if you’re planning to live in your home again, have a low mortgage rate, or are looking for more income. What are the rental prices in the area? Does it make sense to rent your house? In some locations, rental prices can easily cover your mortgage payments. Depending on how much you have left on your mortgage or if you have a low mortgage rate, the rental income from your old house may cover the monthly payments, plus homeowners insurance and property taxes you pay. However, if you’ve recently purchased your house and are looking to rent it out, your mortgage payments may be too high for a lease to cover them. Take a look at houses that compare to yours with regard to size and location. This should give you a ballpark figure on what price your house can lease for. If you aren’t on a tight timeline to leave your current home, take notice of how quickly similar houses in the area take to lease. If rental properties stay empty for more than a few weeks, you may have trouble finding consistent tenants. A real estate agent can help match you with a tenant or give you an idea of your rental prospects. They can also give you insight into whether your location is desirable for tenants. For instance, if it’s near a university or larger employer, you may be able to rent to students or to employees who relocate for that large employer. However, if the house is far from the city center, or you’re located in a residential neighborhood, you may have trouble finding tenants. Do you need equity from your current home? Why are you leaving your old house? Are you purchasing a new home? If you’re planning to upgrade to a larger home, you may need the money from the sale of your old one to place a down payment on your new house. If you have enough equity in your current home, it may make more sense to sell the house instead of renting it. If you’re able to afford the down payment on your new home without selling your current one, usually about 20%, then renting out your old one makes sense. What is the market like in your area? The housing market isn’t consistent across the country, and even different parts of larger metro areas may be more or less robust. If the current market is slow and you think you can sell your home for a higher price in a few years, then it may make sense to rent the house until housing prices rise again. However, if it’s a sellers’ market and you can get the maximum selling price for your home, then selling it may be the better option. Keep in mind that houses that have been rental properties, often have a harder time selling afterward. You may have more wear and tear in the home if multiple tenants have lived there, which may mean spending more to prepare it to show and sell. An experienced real estate agent in your area can help you determine the top vales of your home and whether or not the current market can support that selling price. Agents who have been in the area long enough to become familiar with the housing market are in a good position to help you determine the best time to sell. Will you live in the house again? Consider whether you plan to live in the house or the area again. You may be in a situation that requires temporary relocation, and you plan to return to the original home in a few years. Having a good tenant to live in the house can ensure that your home stays in good condition instead of sitting empty. You’ll also have income from the rental property and building equity in the old home and your new one. Do you have the time and money to be a landlord? For those who are new to investing in rental properties, it may seem easy to rent out their current home and enjoy passive income while paying down their mortgage. However, if this is your first time being a landlord, you may find leasing your property yourself challenging. First, landlords are responsible for making major repairs to the house. Landlords have to fix things like broken pipes, defunct HVAC systems, and structural damage, among other essential repairs. If you don’t have a few thousand dollars on hand to take care of these repairs, you could end up in a bind. There are specific laws in place to protect tenants, including the landlord’s reliability to make major repairs on the house. In addition, there are certain things that you can and can’t do as a landlord. Being aware of Fair Housing Laws is critical to make sure that you don’t inadvertently violate them. Do you need a property manager? A property management company can help vet tenants, collect rents, and arrange for repairs and maintenance on your behalf. A good property management company is also up-to-date on current requirements in your state for landlord obligations. If you’re planning to just lease your house, you may choose to manage the repairs and tenant search yourself, especially if you live nearby. However, if you’re planning to build a portfolio of rental properties, then having one company manage them may be a better option. Property managers can help ensure that your house or houses stay full, including working with local agents, having open houses for prospective tenants, and quickly running background and credit checks for those applying for a lease. As a passive landlord in this situation, you’re able to free yourself of the obligation for emergency repairs and the time searching for people to live in your rental property. Consider rent-to-own Another option when you’re considering whether to sell or rent your house is to engage in a rent-to-own agreement. In these situations, the tenant will place a down payment on the house and make lease payments to you for a specified period. After the lease is up, then the tenant has the option to purchase the home. During the time they’re making lease payments, a portion of those payments will go toward the final price of the house. This option may work for you if the housing market in your area is stagnant, allowing you to cover the mortgage without entering into a long-term obligation to a rental property. These rent-to-own options can be beneficial for tenants, too, as their financial situation may improve enough over time that they’re able to obtain a mortgage. What makes a house a good rental property investment? Does your house have the potential to be a good income property? There are a few things to consider before listing your house for rent. You may have to make some minor repairs and upgrades to your property to attract good tenants who will take care of the house and pay on time. Fresh paint and carpet are usually a must and are required in some areas. The location of your investment property is one of the most important things in determining whether you’ll have steady tenants or be responsible for covering the mortgage out of pocket if the house sits empty. The home’s location can easily make the difference between having a steady tenancy and losing money on the rental property. Final thoughts on renting or selling your home Deciding whether to sell your house or rent depends on carefully analyzing the area and the property’s desirability. Will the area be in high demand for renters, or is it likely that you’ll struggle to find tenants? You’ll also need to take a look at your finances and determine if selling or renting will give you the best return on your investment. Choosing the right real estate agent to advise you in this process can help you answer your question of whether to sell or rent your house.
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