Real estate is comprised of land, the buildings, flora and fauna, cultivated crops, etc. therein. It can be divided into three; industrial, residential and commercial real estates. Residential real estate is the type that is well-known and often referred to if the term is used. Residential real estate involves undeveloped lands, lands that have buildings, etc.
|Advantages of real estate investment
According to Wikipedia, real estate investing is the purchase, ownership, management, rental and/or sales of real estate for profit. This business is one that has a very large market that cannot be satisfied in a long run. This is because housing is a fundamental thing needed for the survival of man.
In this article, we will be looking at the advantages of real estate investing and proffer some tips to ensure that you don’t get into the wrong hands and get duped. Just grab a cup of coffee as we continue with the article.
you can check out our post on top 3 investments to avoid this year 2017
Advantages of real estate investments
1. Steady huge income:
if your real estate property is rented, you know what it means right? Steady income from rents all year round for as long as the property exists. When compared to other investments, it can be seen the ROI for any real estate property is far better than others.
For example, if you wish to put your money into a fixed deposit account, the interest banks will pay you will definitely be small when compared to rents paid by tenants of your real estate property.
2. The rate of appreciation is proportional to inflation:
houses and land in general appreciate as years pass by. The price of a plot of land last year is no more its price today and also, as prices of commodities and other essentials of life increases; the money for rent does so too.
This is one of the main reasons why I so much recommend real estate investment for anyone who really wants to invest his or her money into anything.
3. Real estate investments can be used as collateral: with your real estate investments, you can easily obtain loans from banks and other financial institutions when you provide proof that they are yours.
Unlike other assets that can be used as collateral, its value doesn’t depreciate. If you use your car as collateral, with time, its value drops.
4. Low risks:
once acquired, you real estate property is with little or no risk and you will not have to worry about what others do when they invest in other things. You won’t have to worry about what will happen to your money if the bank shuts down as some do, etc.
5. Available market:
the market for your real estate investment cannot be saturated because day-by-day people wish and seek for where they will live. As earlier stated, shelter is one of the essential things every human being needs to survive and a comfortable one at that.
If you have a house or land even in the remotest part of a state, people will still seek to rent them and you’ll even have to select from numerous contenders. Also, it is a physical and tangible asset and is not like bonds, stocks etc. that are intangible.
Tips on real estate investment
1. Ensure that you investigate the realtor to find out if he’s genuine. This involves verifying ownership of the property before purchase and finding out if the owner really wants to sell the property. This will ensure that you don’t get into some legal cases with owners of the property.
2. Always maintain your property if it is a house so as to keep it in good shape.
3. Be aware that some downturn might occur and prepare for such conditions. Downturns like flood, fire and other hazards might happen and so, you might consider insuring your property.
4. Do some ratings so as to find out if the risk is worth taking, calculate the profit that you are expecting, and also locate the best places to buy the property.
Having discussed these advantages and tips, we advice that if you wish to invest, think real estate and reap the profits.
We would like to hear from you. Share your thoughts in the comment section below.