If done responsibly and wisely, investing in real estate is a great way to grow your wealth. This should be done with conservative financing and with a thorough knowledge of the tax implications. Moreover if you are investing in real estate properly, you will get a superior return of your investment in more than one ways.
The very first means of income would be the cash flow from the rental income. In a stock exchange scenario, dividends would be paid. But a properly selected and managed rental property would give you a steady stream of income in the form of rental payments. If you evaluate, the percentage of income gained through rental payments have exceeded the dividends yielded on average. There is only little risk associated with the cash flow in real estate investments. Sometimes real estate prices and homes in some years and areas would have a downside. But this would not affect the renting property and those who are getting income from that would continue to get the benefits without any decrease in amounts.
The second advantage is that the property value would increase due to appreciation. The value of the investment property would increase over the time. If you do proper research over the property scenario, you can easily find out which property would become the most sought after one in the following years. You can buy that property and wait for the time to ripe. The property value would increase based on factors like economic conditions, scarcity of land etc. hence you make use of the situation and sell it then. But this trend cannot be considered as static as it is subjected to change based on areas and time.
There is one more option available in the property value appreciation. If you get one property in cheaper rates, purchase it and do necessary changes. The renovated property would yield more income. This is much safer method of purchasing. This can be done with the rented property too. You improve the property while you get the steady flow of rental income. Upgrades to the appearance and functional efficiency of a real estate investment property can increase its value significantly. Improving the property is important since it is good to maintain the interests of the renters in the property as trends and styles change.
Rents would be considerably increased as a result of inflation that drives up home construction costs. However the fixed mortgage would remain constant over time. Housing demand occurs as a result of population growth and as result rent prices are increased if housing supply in not met.
As income increase, you can use it to pay down your mortgage. Thus the increase in equity can be used for other purposes and investments. There are options available for the real estate investors to take out equity loans even though it is frequently assessed by selling property. The equity loans can be sought if the terms are right and those funds can be utilized for more investing or other purposes.