Property investment: Short-term gains or Long-term growth

Investments: A Gateway To Wealth

Property Investment has been prevalent in our society for a long time now, seen as an asset garnering monetary benefits on both sides, be it buyer or seller. It has revolutionized itself over the years and stood its ground to stay relevant. Real estate investment has become popular since it offers diverse options from long term to short term options engaging all kinds of investors. Understanding and knowing the pros and cons of both helps the investors to make a calculated decision.

What is Short Term Property Investment?

It is an umbrella term for encompassing various properties available for investment:

• Any investment that lasts for 1 year or less is counted as short term property investment
• In this type, there is an equal chance to make money or lose money, hence there is absolutely no fixed amount one may receive from it.

The higher the opportunity, the higher the risk.

• These are the golden words, which must be kept in mind, while investing. But if one is willing to do so, they have a lot of profit coming their way without having to wait for it.
• Rental properties for sale have gained momentum in the past few years and rightly so. In a world where traveling has become a norm, people seek to stay for a brief period.
• Vacation properties, Air BnB’s, and Farmhouses, are in great demand and a properly maintained house in a good secluded location is all one needs to earn a handsome rental income.

What is Long-Term Property Investment?

• One way to avoid getting involved in higher risk and give the property a breather and a chance to go up to its full potential in an organic manner, long term investment is the way to go
• These investments too come with a chance of risk but they are comparatively less and more stable and don’t keep their investors on toes.
• These investments are likely to benefit the taxers where returns are taxed less than short term gains.

Rental properties on sale

• Even after buying, buyers can continue receiving rent from tenants. This provides a stable cash flow with long term investment
• These properties undergo frequent and strategic renovation to keep up with the recent market demands which in turn increases its value.
• The tedious process of tenant acquisition is avoided by the buyer and he can hold it for as long as he likes with profit in his hands.

Short Term Vs Long Term Property Investment 

Having learned about both types of investment, it is crucial yet vital to pit them against one another to make a calculated decision after considering the value of each of the benefits.

Conventionally, real estate was seen as a long-term investment, wherein investors would hold the property for years before selling. However, investors today have become aware of short-term investments, which have expanded their horizons, and they’ve found a way to gain out of it even more so.

Buying one’s own house vs. buying for renting is a debatable topic in today’s time, wherein renting always seems victorious.

Buying and holding raw land has proved to be advantageous when the town expands.

To sum it up,

Long-term investment gives the following advantages:

• Appreciation – Increase in value over time
• Passive income potential
• Tax advantages
• Less exposure to risk from market fluctuations

Short-term investment gives the following advantages:

• Quick returns
• Market flexibility
• Capital isn’t tied up for a long time.
• Potential for higher profits.

Conclusion 

Real estate market and property investment is one way to increase one’s assets by strategic planning and thinking ahead. It is bound to have periods of growth and decline.

The best and higher returns are yielded by holding the properties, long term and having the power to choose in which cycle to let go of the property and gain profit.

On the other hand, short term ownership in an ever-changing market may not capture the full potential of long term growth often leaving investors questioning their decision.

However, a short term approach can be beneficial in certain markets.

Whichever way an investor goes, no matter how long, or short, in real estate, one will never regret investing in it.