What are the potential benefits of real estate investments?

Investing in real estate offers several potential benefits, among which capital appreciation and rental income are significant factors.

Capital appreciation refers to the increase in property value over time. As the real estate market grows or as property development occurs in a given area, the value of the property can appreciate, leading to potential profit when it is sold. This is a critical aspect for investors looking to build wealth through long-term investments.

Rental income is another compelling reason to invest in real estate. Many investors choose to purchase rental properties to generate consistent cash flow. This income can provide ongoing financial returns, making real estate an attractive option for those seeking to create passive income.

Although other options in the question imply benefits that might seem appealing, they do not accurately reflect the realities of real estate investment. For example, while liquidity (the ease of converting an asset to cash) is typically lower in real estate compared to stocks or bonds, and real estate can carry risks that vary widely based on location and market conditions, the two benefits of capital appreciation and rental income are well-supported in real estate investment strategies.