If you want to become wealthy, then you need to make real estate investment a part of your portfolio.
Real estate refers to properties including land and buildings, along with the natural resources in or on the land, such as; crops, minerals or water. However, real estate business or investment involves; buying, selling, or renting land and buildings.
Do you desire to own lands, residential buildings, shopping malls, schools, sports complex, events centers, office buildings and lots more? In the guide below, you will see why you should starting investing in real estate, various opportunities in real estate business available to you and success tips for investing in real estate.
Why you should invest in real estate
Real estate investment is one of the best investments you can think about.
The reasons are as follows:
1. Real estate investment mostly appreciate in value over time and you can sell it even higher than you acquired it after some time.
2. You can use real estate as collateral to obtain loans from financial institutions.
3. Real estate can be a good source of passive income to you. You can be earning monthly or even annually from payment from rents.
4. It is a good way of diversifying your assets. Investing in real estate in addition to paper assets brings in diversification to your portfolio and balances your portfolio and spreads the investment risks.
5. Building residential houses for rent can help to bring you some sense of fulfillment as you are helping others to have a roof over their heads and you help to better the economy of your nation.
6. Real estate investment on average can out- perform several paper assets like stocks in terms of yield and asset appreciation.
7. Living in your own house can bring you some sense of freedom and independence than when you are living in a rented apartment. See how to build your own house with low income.
8. Having a roof over your head as your own can give you some sense of peace and reduces some financial burden on you and your family in a situation where you loose your job. You don’t need to think of housing cost but only other needs.
9. Real estate is one good investment that beats inflation. Due to constant demand for real estates, the value of real estates is always on the rise, which helps it to withstand inflationary pressures.
10. Real estate investment can be a good source of wealth creation. Passive income generated from a real estate can be further invested into other forms of investments or to acquire more properties and thereby increasing your sources of income and helping you to build more wealth.
11. The income from real estate is predictable and stable. If you have apartment houses, shops or office buildings on rent, you can easily predict what you can earn from it in a year, but you can hardly predict what your stocks or some other paper assets would yield to you.
Nine great ways you can start making money from real estate investment
The world of real estate business is quite broad.
Here are various aspects of real estate you can consider and start making money from :
1. You can invest a real estate based mutual fund. ( Here the mutual fund pools money together and buys and sells properties and profit is shared to members according to their individual contributions). I advise young investors who do not have much funds to start their journey in the world of real estate by investing in real estate mutual funds because, this doesn’t require much funds to start. The process is almost same as other mutual fund investments.
2. Buying lands and keeping them after some months or years and reselling when the value has gone up.
3. Buying buildings and reselling.
4. Buying lands, building on the land and selling the houses.
5. Buying land, buildings and apartment houses and leasing out to people and organisations for money.
6. Becoming a real estate agent and getting commision by bringing sellers and buyers of real estate together.
7. Becoming an estate surveyor and valuer. You need some training for this. They are trained to evaluate the worth of a property and advise investors appropriately.
8. Managing real estate for people at a fee.
9. Becoming a real estate developer. These are usually a team of business people made of civil and structural engineers that develop properties for investors.
Success tips for real estate investment
Here are some tips that should help you succeed as a real estate investor:
1. Don’t limit yourself to just one location or to where you reside. You can own properties in various states or provinces or even various countries. Don’t limit your self to just where you reside.
2. Start with what you have. This is even more applicable to lands. Don’t wait until you have money to buy acres or hectares of land before getting into real estate. You can start by acquiring plots of land or half of a plot of land.
3. Be careful not to fall into the hands of the dubious property agents or dealers.
4. Make sure to do your investigation about the genuineness of a property before committing money to it.
5. Better to acquire lands with Certificate of Occupancy, sometimes referred to as C of O. This might not be applicable in your country. However, find out the government laws about real estates and land acquisition in your country and seek to abide by it.
6. If you are not within the vicinity of your properties ( perhaps you stay abroad ) it is better to contract real estate managers to help you manager your properties. Sometimes, you might not get the full returns or effective management that you need if you allow family members manage the business for you, if you stay abroads.
7. If you have a land and you are not yet ready to start developing it, you can use the land for agricultural purposes, pending when you get funds to developing the land. Leaving a property fallow might attract land grabbers or intruders.
8. Consider acquiring properties in an organised housing estate. Buying properties in an organised housing estate has some advantages which includes higher chances of genuineness of the property, security of the property and being able to pay for the property in installments. There are many new housing estates coming up. Just inquire and you will find several of them.
9. Avoid buying properties in volatile areas. I mean areas that are prone to riots, religious or racial conflicts. In these areas, the value of a property can drastically depreciate when such conflicts occur.
10. Always use the services of real estate lawyers in your real estate business transactions. These lawyers help you to bring in the legal touch to your business, which is very vital to the business.
11. Have a well defined plan in place for going into real estate investment. Your plan will help to keep you focused on what matters most to you. This is vital to your success in the business.
12. Do not over diversify in real estate investment. Do not invest in too many classes of real estate investments which might be difficult for you to manage. If you have the resources to acquire and manage residential or apartment buildings or lands or office buildings or other structures, just acquire as much as you would be able to effectively manage and make a business success out of them.
In the early 1980s, Pastor E. A. Adeboye and his church started acquiring lands at the outskirt of Nigeria’s commercial hub, Lagos, Nigeria at a very cheap price. At that time, no one would agree to go to such a very under-developed place to buy land and so cost of lands there was very cheap. Now, that area has developed massively and is almost regarded as part of Lagos, even though it’s in Ogun state. The church now has many acres of land there in what is now popularly know as the Redemption Camp, which is worth millions of dollars.
If you have neglected or avoided real estate investment in the past, now is the time to start shifting your attention to it. The best time to have started investing in real estate was about 20 or 10 years ago. However, another good time to start is just now.
Those who heed to the advice in this article will be among the landlords of tomorrow. I hope you will be among them?
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