There are two types of investments done on real
estate properties one is long term and the other is short term.
You can purchase real estate for a long-term investment, in which you
purchase the real estate with the intention of renting, or you can make a real
estate investment in the short term, in which you purchase the property, fix it
up, and sell it at a higher value.
Your return on a short-term real estate investment will tend to be
faster and quite a bit higher, but short-term investment involves more risk as
well.
·
Short term Investment
Advantages
of short term investment:-
1.
Quick
return on investment on house
for sale in bangalore– You can make a profit much faster compared to
holding onto the investment property for several years and relying on real
estate appreciation.
2.
Higher
earnings – Short term investments usually have a higher return on investment
compared to long term investments.
3.
Personal
development – A short term investment strategy requires a lot of work in a
short amount of time. So in the process of completing the strategy, you will
typically be able to grow your knowledge of the local real estate market,
construction, financing, about apartments and house
for sale in bangalore.
4.
No
management required – With short term investment strategies, you won’t have to
worry about handling tenants or managing a rental property.
Disadvantages
of a short term investment :-
1.
High risk –
You could lose a lot of money. During mending the old house or apartment you
could have to perform much expenditure.
2.
Holding
costs – This disadvantage is, again, specific to the fix and flip strategy. The
investment property might not sell as fast as you expected.
3.
Stress –
The process of buying an investment property, possibly renovating it, and
finding buyers quickly can be very time-consuming and stressful.
·
Long term Investments
Advantages
of long term investments:-
1.
Passive
investment – Once you’ve bought one or two long term investments, the work can
end there. You can enjoy the positive cash flow or just the appreciation
without having to put in a lot of time or energy. Example- Houses
for rent in Bangalore
2.
Equity –
Long term investments allow you to build equity in your investment property
over time.
3.
Tax
benefits – With a rental property investment strategy, expenses such as loan
interest, insurance, legal fees, property taxes, repair costs, and even
property depreciation are tax-deductible.
Downsides of long term investments:-
1.
Tenant
problems – If you go with a rental property investment strategy, bad tenants
can cause a lot of trouble, including damaging your investment properties in houses
for rent in Bangalore.
2.
Vacancy –
This can be an issue with both of the popular long term investment strategies.
With the buy and hold strategy, your property will always be vacant and you
will have to pay for upkeep from your pocket. Once in a while, you might lack
tenants if you’re running a rental property. This also means that you will have
to pay expenses from your pocket.
3.
Depreciation
– Due to factors such as political unrest or natural disasters, your property
might end up losing value over time.
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