Real Estate Investment often yield potential long term significant benefit for any investor. There are several advantages you can get when investing in real estate.
If you are trying to make up your mind about investing in real estate or you want to know whether real estate investment is more profitable compare with other business investment around, then we urge you to continue reading. We will be discussing the advantages of investing in real estate.
REAL ESTATE INVESTMENT IS EASY TO UNDERSTAND
When you start investing in any venture as a newbie, it can be difficult to understand everything you need to know to make a profit. Many types of investments rely on abstract concepts and complex algorithms, which are especially difficult to understand.
Real estate, on the other hand, involves the purchase of physical property and most people are familiar with real estate to some degree. Investing in real estate can be much easier to understand than complex investments.
REAL ESTATE INVESTMENT IS PROFITABLE
A sure profitable channel to invest money is in landed properties. Investing in Landed properties, by extension real estate, is one of the most suitable and secure alternative channel of investment. This is because LAND will always appreciate greatly.
According to Franklin D. Roosevelt, “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world”.
Even if all businesses crumble OR depreciate in value due to the economic situation, it is not so with investing in landed properties because land never depreciates but appreciates in VALUE. It has been used to effect a bail-out, from financial setback, especially during economic downturn.
REAL ESTATE INVESTMENT PROVIDE AN HEDGE AGAINST INFLATION
Putting your money in viable real estate can protect against the harsh effects that inflation usually has on other conventional instruments. Real estate is one of the few assets that react proportionately to inflation. As inflation goes up, property values and rents also rises.
This can afford investors in real estate the unique advantage of being able to adjust the rates to match inflation.
For example, rental properties that are leased every year are especially effective, since monthly rents can be adjusted upward during inflation, thus providing a cushion against inflation induced losses that other investments suffers from.
REAL ESTATE INVESTMENT CAN BE CONTROLED AND ENHANCED
Real estate investment can be controlled directly unlike other conventional investment instruments, like stocks, for instance, whose rate of return is dependent on third parties (e.g. company management).
When you buy a stock, you hold it for a period of time and hopefully sell it for a profit. Now the success of the stock depends on company management and their corporate success, which the investor cannot control.
Although direct control of the natural, economic and demographic changes that happens in the environment may be impossible, there are many other things relating to the physical property and tenancy that a real estate investor can control and enhance to boost the return on investment.
An investor can carry out repairs, improvements or enhancement to a physical property and when done right can result in increased wealth.
REAL ESTATE CAN BE USED AS COLLATERAL
The most widely recognized and accepted form of collateral in Nigeria and some other parts of the world is Real estate in the form of building and land especially properties with proper document titles (Certificate of Occupancy a.k.a C of O).
Real estate property can protect the interest of both the owner (the borrower) and the bank (the lender), so that funds are released after due verification of documents and terms agreed upon.
REAL ESTATE CAN BE BOUGHT WITH DEBT
This is possible because real estate is a physical property or what is called a hard asset. You don’t need to have enough money to start investing in real estate. As a hard asset, it makes it attractive to financiers i.e. people with money to invest.
Unlike other conventional investment products like stock which are not tangible and can be risky when purchased with debt, real estate on the other hand is market where products are usually bought with debt.
So real estate investment can be done using cash or mortgage financing which allows payment of low initial sums and structured in ways that are safe and affordable, so that large purchases can be made with a relatively small initial investment.
The result is the purchase of a hard asset that appreciates year-in-year-out and increase in value throughout the payment of the loan and even beyond while paying for it primarily with other people’s money.
Real Estate investment is profitable in the short and long term, with lots of benefits for the investor. Because Real Estate doesn’t just secure today, it secures tomorrow. To succeed, you will need to be diligent and arm yourself with necessary information and education. Seek out industry professionals with experience who can guide you in your decision making before starting your investment.
If you would like to receive guidance on how to start you real estate investment, you can get started by contacting us directly.