(MoneyHippo.com) – High inflation and an unsteady stock market might have many investors wondering how best to grow their money. Investing in tangible assets that historically appreciate could be the smartest choice. Although real estate is expensive in most areas of the country, property values are still increasing, and interest rates remain low despite minor increases. These are two important reasons people turn to the housing market for investment and growth. In fact, savvy investors bought up almost one in seven houses in 2021.
Some real estate investors are corporations, but others are individuals looking for a place to grow their money. Once investors buy real estate, they have a few options to make money. They can purchase a property that needs a little work, fix it up, and sell it for more than what they paid to make a profit or rent it out.
Renting out a property allows the buyer to earn consistent income while having someone else pay down the mortgage and increase its equity. Once the homeowner gains enough value in the property, they can borrow against it to buy more real estate or sell for a profit.
While there are no guarantees this type of asset will appreciate in value because dips do happen and there are risks, data shows the value of real estate generally increases over time.
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