Dima Adel
Investment has recently become very important and popular amongst people due to many reasons; among them are securing your families future along with yours. Also, investment will help you meet your financial goals which differs from one person to another, and may include building your wealth, retirement savings, living abroad, your child’s higher education, having your own business and expanding it…etc. There are different channels of investment such as stock, mutual funds, bonds, life insurance, and real estate. Money in the market will always grow, so you need to consider the right investment decisions if you want to earn a high rate of return. On the other hand, saving your money in the bank only won’t be very beneficial because the cost of living increases while the value of your money does not. Real estate investment is considered one the safest options and the greatest among all channels as it is stable, helps you beat inflation, improves equity, and limits immunity from fluctuation. In the following paragraphs, we will mention in details the most important reasons for investment in properties, according to propertyfinder CEO.
Reasons to Invest in Real Estate
As we mentioned before, real estate investment is the safest among all channels. Franklin D. Roosevelt, U.S. president pointed out “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” Also, real estate investment helps you generate more cash flow through a property as it becomes a major issue for many investors especially in places where interest rates are rising. You can have a positive cash flow from this kind of investment through refinancing the property as it is going to lower your mortgage bill payments.
Let’s take Australia as an example as it is one of the countries with highly solid economy. Although taxes are applied on everything there, your home is one of the few things left that the Australian government doesn’t tax you on which in fact help you add value to your home and increases your chance for investment in real estate. “Australian property has increased in value at a rate comparable to that of the share market since 1926 – an average of 11.4 % per annum – despite a succession of wars, disasters, recessions and crises,” according to research by AMP. This means that the value of your home will increase and the price is set to keep rising indefinitely in the future regardless of the political instability and the general economic conditions.
Also, real estate investment will help you gain income for life, thus, you enjoy more of the things you want without any commitment issues. This in fact ensures a relaxed retirement as saving your money in the bank only won’t be very beneficial because the cost of living increases while the value of your money does not.
Similarly, investment in real-estate will help you in building wealth and gain more leverage which means developing your overall return on investment. This in fact will also help you in increasing your profit and paying down your loans or any other depts. Robert Kiyosaki said “Real estate investing, even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth.”
Another reason to invest in Real Estate is that it helps you beat inflation especially in countries with the highest inflation such as Egypt since the value of your home will increase as well as the value of your money despite the economic conditions. In a report issued by propertyfinder – one of the leading real estate online portals in the Mena – the demand for properties for sale in Egypt has massively increased after the fluctuation of the Egyptian bound late in 2016. Inflation affects the country’s economy negatively as it leads to a rise in unit labor costs and lower profits for businesses. This in fact will harm people especially those who are living on a fixed income as they will face survival difficulties, thus, you must be prepared for it.
Strategies and Tips for Real-Estate Investment
Once, you’ve saved enough money and decided to buy a whole building / land to offer residential units for middle class with reasonable prices, this will help you generate more profit every month. Tenants are willing to rent when they find their basic needs such as spacious apartments, integrated services, and reasonable prices. According to an entrepreneur called Marshall Field, “Buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy.” Philippines is one of the countries that real estate prefer to invest their money as it includes a variety of developing cities where they can find renters such as Manila and Uptown Bonifacio. This in fact will help investments in getting high return on investment unlike the developed cities in US for example.
Some investors are more likely to invest in buildings near universities and schools to accommodate. Others invest near the industrial areas to offer residential units for laborers near their factories.
Real estate investment does not only include the residential channel but also the business and the commercial ones. For example, many investors prefer to invest in administrative and office buildings as it is a very profitable long term investment especially when reputable companies are willing to rent in your place. On the other hand, this type of investment is risky as the rental rates can go up and down based on the economy, which in fact, may result in a huge negative cash flow. Thus, you must always plan to have a good amount of money set aside to cover when you face struggles.
Commercial investment is considered one of the preferable options to many investors especially those who understand the market since they know how to sell unique products or ones that matches peoples’ interest. For example, if you planned to visit Canada, you will find that stores targeting Arab cuisine there generate more profit in comparison to other types of cuisine especially in districts and sub-districts that are full of Arabs such as Toronto. According to a real estate professional called Anthony Hitt, “To be successful in real estate, you must always and consistently put your client’s best interests first. When you do, your personal needs will be realized beyond your greatest expectations.” However, before proceeding, you must make sure that you are offering something different from those currently available in the market, develop a marketing strategy including Plan A, Plan B, decide on the price, methods of marketing and so on.
Finally, it is extremely essential to understand why do you need to invest and the benefits that you will get beyond investment. Above, we’ve recognized that the real estate sector is one of the most important sectors in the economy. It improves your financial know-how, help you become wealthy as it is the quickest and least risky investment method. On the other hand, you have to decide on the type of channel that fits you best, develop a plan, keep yourself motivated and exposed to innovative new business models.
