There are two
kinds of real estate investment. The first is to buy, repair or repair a
property, or to keep it as it is and then resell it again. The second is to buy
land, develop it and build a property on it.
Real estate
investment is one of the most powerful investment areas, especially in the long
run. The following is a report published by the magazine "
yourinvestmentpropertymag " that shows the importance of investing in real
estate.
Reason
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1. Easy
to start
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The person
does not need specialized knowledge in this area to start investing in it.
Many real
estate investors did not have the intention from the beginning, to achieve
wealth through real estate.
But they
bought a house to live only, and then they saw its value increase, and
realized how much wealth could be made from selling it, and this was the
moment to start real estate investing.
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2.
Researching real estate is easier than researching stocks
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Investing
in the stock market requires a lot of education. The investor must understand
how the system works, the complexities involved in the trading world, the
search for stock brokers, companies in the market, and other things.
While
researching real estate is much easier, you can simply search for real estate
online, to show a lot of real estate investment opportunities.
There are a
lot of online searches (usually free or inexpensive), visiting the suburbs
and attending auctions, all of which do not require specialized knowledge.
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3. Easy
access to finance
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Mortgage
loans are a major part of a bank's business model. Lenders are more likely to
grant loans in residential real estate than any other asset class.
This is due
to lenders' perception that real estate offers a higher value (up to 95%) and
lower interest rates than any other asset class, including commercial real
estate, which facilitates the borrowing process to invest in real estate.
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4-
Diversity of investment strategies for different persons
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Anyone can
invest in this area regardless of their financial goals. There are several
strategies for real estate investment:
1. Long
term capital growth
Real estate
has demonstrated its ability to achieve long-term financial profit, provided
the appropriate area is selected, the rate of demand and supply is correct.
2. Positive
cash flows
This can be
achieved by selecting properties with high rental rates.
3 -
increase the value of the property
The value
of the old property can be increased, refurbished, worn or even changed.
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5. Price
elasticity
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When buying
a stock, there is no room to negotiate the price; it must be bought at the
market price at that time.
While in
the real estate market negotiation is the basis of the buying and selling
process, there is also considerable room for buying undervalued real estate,
such as a deceased person's property, or selling because of divorce.
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6.
Possibility of using the property
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Real estate
can be used on a personal level. If a person goes through difficult times, he
or she can move to one of his properties (with delaying the lease decisions)
for a long or short period.
If things
improve again, you can invest in the property again, while this is difficult
to do with stock certificates, or gold.
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7.
Investors are not the only ones in the market
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The
important factor that makes the real estate market strong is that investors
are not the only ones who make purchases.
Investors
are a minority in the market, accounting for a small percentage of mortgages,
while homeowners - who do not necessarily buy for investment - represent the
largest proportion.
This
provides market activity and minimizes the effects of volatility.
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8. A
stable market
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The real
estate market is far less volatile than the stock market. Buying real estate
requires some effort, time, research and legal advice, along with long
periods of negotiation and settlement.
This means
that property is less susceptible to short-term speculation in the stock
market. The long time required to buy a property reduces market volatility.
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9 -
Benefit from the projects of others
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This is to
take advantage of the money spent by the government and investment companies
on infrastructure, such as roads, railways and airports.
Such
projects increase the value of prices in cities and suburbs, which have been
plagued by previous problems due to difficult access.
Investment
in new projects such as hospitals, universities and shopping malls provides
jobs and increases demand for housing.
The more
amenities and entertainment in a place, the higher the house prices, and thus
the investor will benefit from real estate from it, without cost anything.
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Transfer
of ownership to children
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The real
estate market is growing in the long term. Investing in it is not only
beneficial to the individual, but also to his children.
Although
children can also benefit from stocks, long-term corporate growth is not as
guaranteed as the growth of the real estate market.
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