Investing in real estate is one of the most logical and safest investment paths for many people. In the long term, real estate investments offer remarkable benefits in terms of both economic stability and profitability. Especially in emerging markets like Turkey, real estate investment is a tangible asset that gains value over time and can generate multiple sources of income.
Whether it is an apartment in Istanbul or a summer house on the Aegean or Mediterranean coasts, real estate investment plays an effective role in providing both a solid investment vehicle in the current economic conditions and long-term financial security. Therefore, “does it make sense to invest in real estate?” The answer to the question will generally be yes depending on many factors.
Let’s explore together 8 factors that make investing in real estate logical!
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Investing in real estate is safe
Investing in real estate is an ideal choice for investors looking for financial security and stability. Compared to other investment vehicles, real estate investments are less affected by market fluctuations. It is considered a solid investment in the long run. Because real estate investments don’t lose value easily.
Investments in residential or commercial real estate have the potential to gain consistent value despite changing economic conditions. Therefore, those who are looking for financial stability and security and ask themselves: Does investing in real estate make sense? It is an investment tool that investors who often ask themselves the question turn to.
It is a specific investment
Investing in real estate is a concrete and tangible type of investment. This makes it different from other investment instruments. The term “real estate” really emphasizes this tangibility. Although some consider the illiquidity of real estate investment to be a disadvantage, it is actually an important advantage. Because intangible assets like stocks can lose their value completely. A specific real estate investment always represents value.
The investor has the opportunity to view the property before buying. In addition, after the purchase, all control passes to the investor. This means he can determine every detail, from financing to leasing, necessary repairs and the timing of the sale.
On the other hand, with assets like stocks, you are bound by the decisions of the company invested in. This causes control to shift away from the investor. When investing in real estate, therefore, long-term security and controllability of the investment comes to the fore.
Real estate investment gains value
Investing in real estate has the potential to gain value over the long term. This is a significant advantage for investors. Factors such as population growth, economic growth and urbanization contribute to the rise in real estate prices.
In particular, strategically chosen real estate in the right location increases in value over time. This increase brings significant profit to the investor. Real estate in Turkey, especially in large cities such as Istanbul, increases in value with environmental development and urbanization.
Research the area thoroughly to see if there are any negative situations specific to the location of the house. Do a detailed survey at the current price.
Earthquake, war, epidemic, etc. If such situations do not occur, your real estate investment will gain in value. However, if these extreme situations occur, the value of all investment instruments will decrease or disappear. In such cases, it is again important to have tangible assets.
Investing in real estate protects against inflation
Investing in real estate provides an effective hedge against economic uncertainty caused by inflation. Historically, rent increase rates have generally increased in line with inflation.
This offers three key benefits to real estate investors:
- First, as inflation rises, investors can increase their rental income accordingly.
- Second, the market value of rental properties will increase with the rate of inflation.
- Third, and perhaps most importantly, loan repayments are independent of the impact of inflation. As inflation increases, its real costs decrease.
These features are among the factors that make real estate investment in Turkey particularly attractive for investors. Real estate investment plays an important role in protecting the purchasing power of investors by acting as a hedge against inflation. Therefore, “is it profitable to invest in real estate?” We can say yes to the question due to its protection against inflation.
The potential for income diversification is high
Real estate investing offers investors a wide range of income. They thus have the opportunity to diversify their portfolios and reduce financial risks.
Real estate investors can generate income in a variety of ways, from traditional long-term rental strategies to short-term Airbnb rentals.
In addition, real estate investors make money without directly owning the property. This is possible by investing through a real estate investment trust and the method of interest-free participation.
This variety helps investors strengthen their portfolios and diversify income streams, especially during economic fluctuations and different market conditions in Turkey. Real estate investing is a versatile investment vehicle that provides financial diversification and security rather than relying on just one source of income.
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Investing in real estate creates passive income
What is passive income? Passive income is a type of income that does not require active work and provides continuous and regular income.
Real estate investing is unique in that it creates a stable and permanent source of passive income. Owning a rental property allows you to earn regular rental income. This means that investors get a regular income by renting out their properties on a short, medium or long term basis.
In this process, while the value of the property increases, the investor receives passive income without actively working. With the increasing rate of urbanization and increasing demand for real estate, especially in Turkey, real estate investment has the potential to provide a steady source of income.
It is a question like “Is it right to invest in real estate?”, “Is buying a house a profitable investment?” The answer to these questions is clearly positive with its ability to generate passive income. Investing in real estate provides an opportunity to earn a stable income over a long period of time with only capital investment.
It offers a leveraged investment opportunity
What is leveraged investing? A financial method that allows an investor to trade with amounts greater than his own capital is called leveraged investing.
Real estate offers a unique advantage to investors with the ability to make leveraged transactions. Financial instruments such as home equity loans and mortgages allow investors to build a larger portfolio of properties beyond their equity. This has the potential to significantly increase the return on investment.
Of course, using leverage comes with certain risks. However, if properly managed and planned, it brings serious profits to the investor. To be successful in real estate investment, it is necessary to analyze the market conditions well, correctly evaluate the potential for increasing the value of the real estate and apply appropriate management strategies.
At this point: “Where should we invest in Turkey?” and “where should real estate be invested?” Researching these topics becomes important.
For more detailed information 10 Things You Should Know About Making Money With Real Estate Don’t miss our article!
Investing in real estate provides tax benefits
Investing in real estate offers significant tax benefits. This creates an opportunity for investors to reduce costs and increase profitability. Investors can benefit from benefits such as not paying taxes during cash flow, the ability to deduct loan interest, property tax, operating costs, insurance costs and tax write-offs.
In particular, if a real estate investor uses the profit from the sale of an investment property to purchase another investment property, he will benefit from not paying capital gains tax. In addition, in some countries it is possible to obtain a residence permit or citizenship by investing in real estate of a certain size.