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The real estate market has a history of long-term appreciation. As land becomes scarce and demand for real estate increases, especially in urban growth areas, property prices tend to increase over time.
Investing in rental properties can provide a stable and predictable cash flow. Rents paid by tenants can generate a consistent monthly income, which can be used to cover investment-related expenses or reinvested in new properties.
Real estate offers a form of diversification for investors. By having a portion of your portfolio allocated to real estate, you can reduce your overall risk, as real estate market performance tends to behave differently compared to other types of investments.
Real estate has proven to be an effective hedge against inflation. When real estate prices and rents rise, owners benefit from an increase in the value of their assets and the income generated by them.
The real estate market allows the use of leverage, i.e., you can finance part of the value of the property through loans. This means you can control a higher-value property with a relatively smaller initial investment. If the appreciation of the property is favorable, your return on investment can be magnified.
In many countries, real estate investment offers attractive tax benefits. Tax deductions related to maintenance, depreciation, and financing expenses can help reduce an investor's tax burden.