Every so often persons working to make up their marbles where to placed their money ask me if real estate ventures tend to be or less profitable, compared to other manufacturers opportunities around.
My fact is always that in addition to its potential for yielding significant profits, investing in property often confers long terms benefits.
I discuss five such advantages below:
1. You are able to Refurbish (to improve value of) Real-estate
As soon as you buy a stock, you have it for some time to hopefully flip it for a profit. The achievements of the stock is determined by company management as well as their corporate success, that is from the control.
Unlike other conventional investment instruments, like stocks, as an illustration, whose rate of returns, be determined by any other companies (e.g. company management), property investments are directly through your control.
While you won't be able to regulate changes which could happen in demographic and economic aspects, or impact of nature induced changes, there are lots of other aspects that one could control, to enhance the returns on your purchase of it.
Examples include aspects in relation to adding repairs, or improvements/enhancements on the physical property and tenants you permit to exist in it.
Should you it right, the price of your investment will grow, producing increased wealth for you personally.
2. Real Estate Investing, When Done properly, is Proven to be Profitable Even During an economic downturn (such as the one we're in right this moment)
They have on several occasions, been employed to effect a bail out, from financial setbacks, like people who many have experienced throughout the economic downturn happening in Nigeria today.
Numerous clients have confided in me that due to the present financial situation, they aren't certain of profitable channels to take a position their cash. Some of them have completed bonds and treasury bills, but they are in dire need of a new investment.
There was extensive discussions, and according to my expertise being a property consultant, I recommended landed property investment, because the the most appropriate and secure alternative channel of investment.
This is because, even if every business crumble, land will usually appreciate greatly. Then to operate a vehicle my point home, I ended by sharing the subsequent apt quote, with a former American president:
"Real estate is not lost, nor caught up, managed with reasonable care, it comes down to the safest purchase of the world" - Franklin Roosevelt.
Unsurprisingly, your client thought we would listen to me - and signed up: it was the well-known, common sense course of action!
3. Real-estate Investments Are Proof against Inflation
In other words, investing your cash in ownership of viable property can protect you against the tough effects that inflation typically has on other conventional investments.
The reason being value of real estate generally will surge in positive correlation with inflationary pressures. This is the reason property values and rental rates climb with rising inflation.
The nature of real estate property, therefore affords owners the initial good thing about having the ability to adjust the rates they feature, to check inflation.
Monthly rents by way of example may be raised to make up for inflation - thus providing a cushion effect against inflation induced losses that other monetary investments suffer.
4. Property is Uniquely internet marketing Universally Acceptable as Collateral, Towards Securing Funding from Banks
Today, real-estate in form of either building or lands, with proper titles (i.e. Certificate of Occupancy - aka "C of O") is easily the most recognized and accepted way of collateral in Nigeria - and a few other regions of the world.
The unique feature of being able to shield the interests of the two borrower and the bank (that's doing the lending), so that funds may be released i.e. after due verification, and fine print are agreed.
This is one of many key advantages a private C of O has in the global C of O, as the former (i.e. private C of O) is the thing that will be necessary for intending borrower, in the event of any future financial dealings with bank in Nigeria.
5. Real Estate Investing Allows Utilization of Other's Money
Put simply, it is possible even if you do not have access to enough money. You just need to understand how.
This is possible because real estate property is physical property or what is known as a tough asset. That is an attribute that makes it popular with financiers i.e. people with money to get.
That is why often times real estate products are bought with debt - unlike conventional investment goods like stocks that are not tangible, and for that reason classified to be more dangerous to buy.
So owning a home can be carried out using cash or mortgage financing. Inside the latter case, payments is very arranged to permit payment of low initial sums, provided by you or even a willing vacation.
Those payments will be happening on landed property which will continue increasing in value throughout the duration of such payments - as wll as beyond. That further inspires confidence inside the minds of people financing the purchase, their investment remains safe and secure.
No wonder that real estate investment has continued to prosper for thus long!
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