Unlike other investment options, real estate investments are one the safest ways of investing.
There are lower associated risks, assurance of continued income and interest and a host of benefits attached.
Unlike stocks, crowdfunding projects, fixed bank deposits and other options, return on investment for real estate can be higher and it allows for diversification.
Examples of Real Estate Investments include the following:
This is when you buy land without building on it and then, reselling for a profit. This type of investment requires little, or no effort at all.
What is important is, having the funds to purchase the piece of land, an in-depth knowledge of land ownership and the buying and selling processes, in the area you would like to purchase the land.
You can start by buying a plot of land and move on to acquire more, as you resell and make profits.
This involves acquiring property in a spot-on location. You, thereafter, develop on it, buildings for luxury, rental, or commercial purposes that you can sell, at a very high profit margin.
For example, developing a property with N100,000,000 in a good location, can get you twice that amount, when you resell.
Real Estate Investment Trusts (REITs)
REITs are a form of collective investment schemes. Depending on the agency, or commission regulating it, this involves pooling capital, from investors and using this, in the acquisition of income-generating real estate.
This may seem like crowdfunding and it is, but this time, the portfolio gets placed under professional management, to maximize returns for the investors.
This is in addition to getting regulated, by a commission, so, safety is guaranteed.
Benefits of engaging in Real Estate Investments include the following:
There are numerous ways, in which real estate investors can make their money. There is money making, through rental income, land flipping, fix and flipping, farming, mining and others.
Importantly, however, real estate values tend to increase, over time and with a good investment, you can return a sizeable profit, when you are ready to sell, or when you are renting.
With real estate, investors are assured of long-term financial security. This, also translates to having a sense of security, as land and property can appreciate in value, over time.
Unlike with other forms of investment, this provides you with significant income, to cover your expenses, to make extra money on the side to save, towards retirement, or carry out an important project.
Investing in real estate protects you from inflation.
For instance, even, with high inflation, rental income and property values, could increase significantly.
This is why real estate investors, welcome inflation with open arms because, as the cost of living becomes high, so does their cash flow.
Protection from Risks
Having real estate helps you mitigate risks. Having a calculated income every month is an outstanding benefit, but real estate investment means, protection from investments with higher risks.
For instance, having stock is good, but real estate in one’s portfolio, offer’s diversification. This helps offset risks, because the investment is not solely on one investment profile.
Of course, dabbling into real estate has its own technicalities. You need to have the ground knowledge and in most cases, the help of an agent, to guide you in real estate investment strategies.
For instance, good location plays a key role, when it comes to appreciation, or attracting the needed investors. Having someone that is able to certainly predict viable locations will, therefore, help you.
Luckily, there are resources online and offline, to get you started and legitimate real estate investment companies to guide you along the way.
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