Real estate: an ideal long-term investment

real estate investment is good long term

If you’re in the process of finding a home for your investment cash, then it’s likely that you’ve considered many options. From the stock markets to your pension fund and everything in between, there are lots of options to think about. However, when it comes to long-term security, perhaps one of the best potential choices to consider is real estate. 

Investing in homes, offices and commercial spaces is certainly not a guaranteed route to riches, but they’re the sort of markets that can really pay off if you take an overarching, decades-long view. This article will explore some of the reasons why time is a great healer for the property market, and discuss possible locations that those who want to invest in real estate can choose.

Demand always there

At its most basic, of course, there’s the fact that real estate will always be required in order for people to live and work. This is perhaps the main way that the real estate market differs from other asset classes, such as the stock market – while some firms that 30 years ago were considered excellent stock choices are now out of business, it’s hard to envisage a time when demand for homes and commercial properties will be non-existent.

There are, of course, fluctuations. Main Street is under threat from the advent of online shopping, for example, while demand to live in a certain area can go down. However, given the nature of property, this is a market that can – and does – reinvent itself over time. Even a decade or so after the financial crash, the US housing market is seeing price rises of over 6% some months, suggesting that there will always be at least some hope for real estate investors.

Lots of choice

Buying a property in one location is a significant commitment, but it’s not the sort of decision that is irreversible. With the whole of the US from which to choose, there are plenty of places that you can put your money if you’re buying real estate – and that goes for the future as well as for now. Investing in one property doesn’t mean that you have to stay there forever if the market then becomes more buoyant elsewhere, and this offers a certain degree of security. Once you’re on the property ladder, you can transfer that equity somewhere else if you so wish – but by making the investment to begin with, you’ll be able to benefit from hopefully rising prices and give yourself more choice down the line.

Property gives you the sort of flexibility that a simple stock or other investment can’t give. Investing in Park City, Utah real estate might mean that your investment is located in and around Park City for now, but purchasing a home here doesn’t mean that you’ll be locked in forever. You’ve got every other town and city in the US to move to if your circumstances change in ten or 20 years’ time, whereas you’ll only ever have a finite number of companies or instruments from which to choose.

Somewhere to live

However, investing in property now provides another, more personal form of long-term security. After food and water, shelter is the main human need – and if you invest in property now, then you’ll always know that you’ll have somewhere to live in the future no matter what happens. In this way, a property investment is a personal investment as well as a commercial one. Once you’ve paid off the costs of your investment, such as a mortgage, you’ll have a tangible and useful item at the other end that can protect you and your family if times get tough.

If you’re a serial property investor, of course, you might be hoping that your other investments will work out in such a way that you can buy your dream home for retirement and enjoy a much higher standard of living once you make the decision to stop working. However, by placing your cash in bricks and mortar, your own personal worst-case scenario will never include homelessness or housing instability – as you’ll always have somewhere to go.

There are clearly many reasons why someone would choose to invest in real estate. From the opportunities that it provides for long-term personal security to the high likelihood that property will always be in demand, the appeal of tying up cash in a physical asset rather than on the stock market or an alternative financial instrument is clear for all to see.

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