Every now and then persons seeking to constitute their minds where you can put their money ask me if real estate ventures are more or less profitable, compared to other businesses opportunities around.
My response is often that apart from its potential for yielding significant profits, buying real real estate often confers long conditions benefits.
I discuss five such advantages below:
1. YOU COULD Refurbish (to Enhance the worthiness of) Real Estate
After you buy a stock, you hold it for a time frame and hopefully sell it for a profit. The success of the stock is determined by company management and their commercial success, which is out of your control.
Unlike other conventional investment instruments, like stocks and shares, for instance, whose rate of returns, rely upon third parties (e.g. company management), real real estate investments are straight under your control.
While you will never be in a position to control changes that might occur in demographic and economical aspects, or impact of nature induced changes, there are a great many other aspects that you can control, to improve the returns on your investment in it.
Examples include aspects associated with adding vehicle repairs, or improvements/enhancements to the physical property and tenants you allow to stay in it.
If you still do it, the value of your investment will grow, leading to increased riches for you.
2. Real Estate Trading, When Done Right, is Shown to be Profitable Even Throughout a Recession (like the one we’re in right now)
It is wearing several events, been used to result a bail out, from financial setbacks, such as the ones that many have observed during the monetary downturn happening in Nigeria today.
A sigificant number of clients have confided in me that because of the present financial situation, they are not certain of profitable stations to get their money. A few of them are finished with bonds and treasury bills, but are in dire need of a fresh investment.
We had intensive discussions, and predicated on my know-how as a real estate advisor, I recommended landed property investment, as the utmost suitable and secure alternative route of investment.
It is because, even if all businesses crumble, land will usually appreciate greatly. Then to operate a vehicle my point home, we ended by sharing the following apt quote, with a former American leader:
“Real estate can not be lost, nor overly enthusiastic, managed with sensible care, it’s about the safest investment on the planet” – Franklin Roosevelt.
Not surprisingly, the client thought we would take my advice – and registered: it was the most obvious, common sense move to make!
3. Real Estate in Koh Samui Opportunities Are Immune to Inflation
Quite simply, investing your cash in ownership of viable real estate can protect you from the harsh effects that inflation usually is wearing other traditional investments.
This is because the value of real estate generally tends to rise in positive correlation with inflationary pressures. This is why property worth and rental rates rise with rising inflation.
The nature of real estate, therefore affords owners the initial advantage of having the ability to adapt the rates they provide, to complement inflation.
Once a month rents for example can be raised to pay for inflation – thus providing a cushion effect against inflation induced losses that other monetary investments suffer.
4. PROPERTY is Uniquely to be Universally Suitable as Security, Towards Securing Funding from Banks
Today, real real estate in form of either building or lands, with proper game titles (i.e. Certificate of Occupancy – aka “C of O”) is the best and accepted form of guarantee in Nigeria – and some other areas of the world.
It has the unique feature to be in a position to protect the pursuits of both the borrower and the lender (that’s doing the financing), so that money can be released i.e. after anticipated verification, and conditions and conditions are arranged.
That is one of the main element advantages an exclusive C of O has on the global C of O, because the former (i.e. private C of O) is exactly what will be needed by the intending borrower, in case of any future financial dealings with loan provider in Nigeria.
5. Real Estate Making an investment Allows Use of OTHER’S Money
Quite simply, you can do it even if you don’t have enough money. You merely need to know how.
That is possible because real estate is physical property or what’s called a difficult asset. That’s an attribute that makes it attractive to financiers i.e. people who have money to get.
That is why many times real estate products are bought with debt – unlike conventional investment products like stocks that are not tangible, and for that reason regarded as being more risky to invest in.
So owning a home can be carried out using cash or mortgage financing. Inside the last mentioned case, obligations can be so set up to allow payment of low primary sums, provided by you or a prepared third party.
Those payments will be happening on landed property that may continue increasing in value throughout the duration of such payments – and even beyond. That further inspires self-assurance in the imagination of those funding the acquisition, that their investment is safe.
Little wonder that real estate investing has extended to prosper for such a long time!
[A Expression OF CAUTION] The listed benefits notwithstanding, I still give prospective shareholders that due diligence is an essential requirement of succeeding.
Whether you decide to do everything yourself or use industry professionals like me, it is imperative that you exercise extreme care and arm yourself with relevant information and education.
This is something I advice my clients to do on a regular basis, to allow them to make good decisions in investing.
The importance of the above can’t be overstated, especially in Lagos where quite a number of individuals, experienced their fingers badly burnt, because they didn’t take the needed precautions.