Every now and men hoping to make up their minds where to place their money ask me if real estate ventures are less profitable, compared to other businesses opportunities around.
My reply is always that apart from the potential for yielding significant gains, investing in real estate often hastens long terms benefits.
I discuss five such benefits below:
The success of the stock is dependent upon company management and their company achievement, which is outside of your control.
Contrary to other traditional investment tools, such as stocks, for example, whose speed of yields, depend on third parties (e.g. company management), property investments are directly under your control.
Though you won’t have the ability to control changes which may occur in demographic and economic aspects, or impact of nature triggered changes, there are lots of other aspects that it is possible to control, to increase the returns on your investment in it.
Examples include aspects about adding repairs, or improvements/enhancements into the physical property and renters you allow to reside inside.
If you do it right, the worth of your investment will grow, resulting in increased wealth for you.
It has on several occasions, been utilized to influence a bond out, from financial setbacks, like the ones that many have experienced throughout the economic recession happening in Nigeria today.
A substantial number of clients have confided in me due to the current financial scenario, they’re not sure of lucrative channels to invest their cash.
We had extensive negotiations, and according to my experience as a property consultant, I recommended landed real estate investment, as the most appropriate and safe alternative channel of investment.
That is because, even though all businesses crumble, property will always appreciate considerably. Then to drive my point home, I ended by sharing the following apt quotation, by a former American president :
Unsurprisingly, the customer opted to take my information – and signed up: it had been the clear, common sense thing to do!
3. Real Estate Investments Are Immune to Inflation
To put it differently, investing your money in ownership of workable real estate can protect you from the unpleasant effects that inflation usually has on other traditional investments.
This is because the value of property usually tends to grow in positive correlation with inflationary pressures. This is the reason why property values and lease prices go up with increasing inflation.
The character of real estate, therefore affords owners the exceptional benefit of being able to correct the rates they supply, to match inflation.
Monthly rents by way of instance can be increased to compensate for inflation – thus providing a cushion effect against inflation induced losses which other monetary investments suffer.
Today, property in form of either lands or building, with appropriate names (i.e. Certificate of Occupancy – aka “C of O”) is the most recognized and accepted form of security in Nigeria – and also several other areas of the world.
It has the exceptional feature of being able to protect the interests of both the borrower and the bank (that is performing the lending), so that funds could be released i.e. after due verification, and terms and conditions are agreed.
This is one of the key benefits an individual C of O gets over the worldwide C of O, because the former (i.e. private C of O) is exactly what will be needed by the intending borrower, in the event of any future financial dealings with bank in Nigeria.
To put it differently, you are able to do it even if you do not have sufficient cash. You simply need to know how.
This is possible because cebu condos real estate is bodily property or what is called a hard advantage. That is an attribute which makes it appealing to financiers i.e. individuals with cash to invest.
That is why a lot of times real estate products are purchased with debt – unlike traditional investment products like stocks that are NOT tangible, and consequently perceived as being more risky to put money into.
So real estate investment could be done using cash or mortgage funding. In the latter scenario, payments could be so arranged to allow payment of low first sums, provided by you or a willing third party.
Those payments will be happening on landed property that will keep on increasing in value during the duration of these obligations – and indeed beyond. That further inspires confidence in the minds of those funding the acquisition, that their investment is safe.
Little wonder that real estate investing has continued to prosper for so long!
The recorded benefits notwithstanding, I tell prospective investors that due diligence is an essential requirement for succeeding.
Whether you do yourself or use business professionals like me, it is very important that you exercise caution and equip yourself with pertinent information and education.
This is something I advise my clients to do all the time, so they could make great decisions in investing.
The value of the above cannot be overstated, especially in Lagos where quite a number of people, have had their fingers badly burnt, because they neglected to take the needed precautions.