INTRODUCTION
When you consider various investment vehicles such as investing in equities, bonds, fixed deposits, mutual funds, digital currency, and cryptocurrency, Real estate always stands out, this can be largely attributed to the fact that when you invest in real estate, you move from poverty to wealth and financial stability. In this short article, we will be looking quickly at reasons why you should invest in real estate.
You can invest in real estate in any of the following methods
- Land Banking
- Rental Properties
- Shortlet Apartments
- Property Development
- Commercial Real Estate
- Real Estate Investment Schemes
Land Banking: This defines a process where an investor accumulates large portion of lands in a developing or rural community for the sole purpose of holding it for a very long term in order to sell much later when it must have appreciated in value or to develop in future time.
Land banking is a simple and lucrative way of beginning your journey to invest in real estate. It offers you great opportunity to buy land at a very cheap price and make capital profit of up to 200% in the long run.
It is usually done with the long term in view. And the investor must be sure to get property that is free from encumbrances.
Rental Properties:
This can either be residential or commercial. In either case, the investor buys or build a house, office , block of flat etc. for the sole purpose of generating annual or monthly income depending on location.
Using this method to invest in real estate is as old as real estate itself.
Rental Properties can be transferred to many generations. And this can serve as a continuous source of cash flow so long as they are well maintained and always in perfect conditions, with all necessary bills well paid.
Shortlet Apartment:
Due to the rising level of urban migration and the need for adequate security and privacy, a lot of inter city travelers prefer to stay in a short let apartments than a hotel.
AIRBNB has disrupted the hotel industry a lot and such has made the short let business a very lucrative aspect of real estate investment.
In Lagos for instance, a lot of investors buy 1/2/3 bedroom apartment in very nice locations in major cities like Lekki, Ikoyi, Victoria Island, Aja etc. and list such out for short let. The prices can range from N50,000 to N250,000 per night.
Families on vacation prefer a short let apartment than a regular hotel.
Property Development:
This is where the big boys play mostly in. It includes but not limited to buying of large acres of land and selling with the purpose of developing as a residential estate, or building of houses to sell and manage the estate.
It also includes buying of dilapidated structures, remodeling it and sell off at a huge profit. This model is highly capital intensive and also very profitable.
Commercial Real Estate:
These investors focus on developing strictly for commercial uses, such could be hotels, shopping malls, hospital, hostels, Schools, etc.
These are all money spinners . You are definitely going to get your money with a very cool return on investment in a record time. And also, in the nearest future, such asset can be sold or use as a bank collateral.
These is another proven method to invest in real estate
Real Estate Investment Schemes:
Those investing in real estate investment schemes actually earn huge return on investment without a property to their name.
All they do is, use their money to invest with a reputable company who engages in property development.
These companies in turn reward investors from their profit. It is one way of earning constant passive income in the real estate industry.
Now that we have looked at the various ways one can invest in real estate, lets look briefly at the key important reasons you should invest in Real Estate
Potential For Appreciation:
Real estate has historically appreciated in value over time, meaning that the property you buy today could be worth more than in the future without you doing anything, and much more if you do a little to enhance its worth.
Cash Flow:
Real estate can provide a steady stream of passive income, either through rental income or lease payments. Cash flow properties are investors delight.
Tax Benefits:
Real estate investors can take advantage of various tax deductions and benefits, such as mortgage interest deductions, property tax deductions, and depreciation.
Diversification:
Real estate can be a valuable addiction to a diversified investment portfolio, as it has a low correlation with other asset classes such as stocks and bonds.
Hedge Against Inflation:
Real estate values tend to rise with inflation, meaning that owning real estate can provide a hedge against inflationary pressures and the falling value of raw cash.
Tangible Asset:
Unlike most other investment vehicles like bonds, stocks, mutual funds, insurance, digital money, or cryptocurrency, real estate is a tangible asset .
You can see it, feel it and touch it, any time, any way without fear of vanishing. This alone provides a sense of security and stability to the investor and makes real estate a better investment alternative.
Control:
Real estate investors have a high degree of control over their investments, as they can make decisions about property management, renovations, and other aspects of the investment.
Conclusion:
If I were to choose, again and again , the most preferred vehicle to real wealth and financial stability, I would without a doubt choose to invest in real estate over any other investment opportunity.
With the right guide, you can not go wrong investing in real estate.
And land banking, in particular, is my preferred model for investing in real estate, this is largely because it is less of a hassle, has low capital entry and has a huge capacity to make you good returns on investment.
To learn about our various opportunities to make money from land banking, contact us today