5 Essential Features That Make Real Estate Investing Profitable

Every now and then persons trying to make up their minds where to put their money ask me if real estate ventures are more or less profitable, compared to other businesses opportunities around.

My response is always that apart from its potential for yielding significant profits, investing in real estate often confers long terms benefits.

I discuss five such advantages below:

1. You Can Refurbish (to Enhance the Value of) Real Estate
After you buy a stock, you hold it for a period of time and hopefully sell it for a profit. The success of the stock depends on company management and their corporate success, which is out of your control.

Unlike other conventional investment instruments, like stocks, for instance, whose rate of returns, depend on third parties (e.g. company management), real estate investments are directly under your control.

Examples include aspects relating to adding repairs, or improvements/enhancements to the physical property and tenants you allow to live in it.

If you do it right, the value of your investment will grow, resulting in increased wealth for you.

2. Real Estate Investing, When Done Right, is Proven to be Profitable Even During a Recession (like the one we’re in right now)
It has on several occasions, been used to effect a bail out, from financial setbacks, such as those that many have experienced during the economic downturn happening in Nigeria today.

A considerable number of clients have confided in me that due to the present economic situation, they are not sure of profitable channels to invest their money. Some of them are done with bonds and treasury bills, but are in dire need of a new investment.

We had extensive discussions, and based on my expertise as a real estate consultant, I recommended landed property investment, as the most suitable and secure alternative channel of investment.

This is because, even if all businesses crumble, land will always appreciate greatly. Then to drive my point home, I ended by sharing the following apt quote, by a former American president:

“Real estate can’t be lost, nor carried away, managed with reasonable care, it’s about the safest investment in the world” – Franklin Roosevelt.

Not surprisingly, the client chose to take my advice – and signed up: it was the obvious, common sense thing to do!

3. Real Estate Investments Are Immune to Inflation
In other words, investing your money in ownership of viable real estate can protect you from the harsh effects that inflation usually has on other conventional investments.

This is because the value of real estate generally tends to rise in positive correlation with inflationary pressures. This is why property values and rental rates go up with rising inflation.

The nature of real estate, therefore affords owners the unique advantage of being able to adjust the rates they offer, to match inflation.

Monthly rents for example can be raised to compensate for inflation – thus providing a cushion effect against inflation induced losses that other monetary investments suffer.

4. Real Estate is Uniquely for Being Universally Acceptable as Collateral, Towards Securing Funding from Banks
Today, real estate in form of either building or lands, with proper titles (i.e. Certificate of Occupancy – aka “C of O”) is the most recognized and accepted form of collateral in Nigeria – and some other parts of the world.

It has the unique feature of being able to protect the interests of both the borrower and the bank (that’s doing the lending), so that funds can be released i.e. after due verification, and terms and conditions are agreed.

This is one of the key advantages a private C of O has over the global C of O, because the former (i.e. private C of O) is what will be needed by the intending borrower, in the event of any future financial dealings with bank in Nigeria.

5. Real Estate Investing Allows Use of Other People’s Money
In other words, you can do it even if you do not have enough money. You just need to know how.

This is possible because real estate is physical property or what is called a hard asset. That is an attribute that makes it attractive to financiers i.e. people with money to invest.

This is why many times real estate products are bought with debt – unlike conventional investment products like stocks which are NOT tangible, and therefore perceived as being more risky to invest in.

6 Benefits of Real Estate Investment for Savvy Entrepreneurs

As being a property investor isn’t always glamorous however it is among the how to build wealth within the Long haul, specifically for the entrepreneurial-minded. Listed here are six reasons why you need to consider purchasing rental qualities.

1. Income.

Lots of people purchase rental qualities due to the money flow – the additional money that’s left in the end the debts happen to be compensated. The money flow can offer ongoing, monthly earnings that are mostly passive, enabling you to spend time creating a business, traveling or reinvesting in additional property.

Income from property is stable and more foreseeable than other companies. That’s ideal for entrepreneurs long lasting the good and the bad of start-up existence. The money flow might help float you although the bad occasions and live well throughout the good occasions.

2. Tax benefits.

Allow me to inquire quick questions: should you earn $100,000 at the own small business and that I earn $100,000 through rental qualities, who get’s to help keep more?

Actually: I actually do. Since the government rewards apartment proprietors.

Not just may be the income caused by your rentals not susceptible to self-employment tax, the federal government offers tax benefits including depreciation and considerably lower tax-rates for lengthy-term profits.

3. The borrowed funds pay lower.

When you purchase accommodations property utilizing a mortgage, your tenant is really the main one having to pay the loan payment, thus growing your internet worth every month. Due to the loan pay, lower accommodations rentals are basically a checking account that grows instantly, without you depositing money every month.

Today you may owe $200,000 on the apartment, but the coming year you may only owe $195,000 since the tenant is making the payment for you personally, causing you to $5,000 more potent. Three decades lower the street, or regardless of the term of the loan, it’s compensated lower to $. You have a substantial asset that you could sell or continue renting, all because of your tenant having to pay the mortgage.

4. Appreciation.

As the loan has been compensated lower the need for the property, generally, rises. Yes, I understand, recessions do happen. Values do increase and lower. Use in the wrong duration of the marketplace. I receive it.

However…

With time, values do climb greater and greater. This is exactly why I am not within this property game for one year or perhaps a decade. I’m within this for existence. I understand my qualities continuously climb to ensure that 3 decades from now, everything is definitely worth way over I’m having to pay for this today.

5. A hedge against inflation.

Are you able to imagine having to pay $ 10 for any gallon of milk? Or $ 5 for any chocolate bar? While individuals prices appear exorbitant for you, this is actually the future due to inflation. Inflation is the procedure through which prices increase because of the worth of money decreasing.

Some people fear inflation, like an apartment owner, I expect it!

Once the cost of the gallon of milk hits ten dollars a gallon, you know what else will shoot over the top? Everything, including rents and property values! The main one factor that won’t increase, however, is my fixed-rate loan payment. As inflation pushes living costs greater and greater, my income is only going to increase. For this reason, the property is frequently known as “a hedge against inflation.” When inflation hits – I am ready!

6. Control.

I do not like my future associated with a boardroom on Wall Street or perhaps a nervous Chief executive officer in Plastic Valley.

For this reason, I select to take a position the majority of my earnings in tangible estate, knowing that I’m the one that accounts for my failure or success.

Top Things Buyers Look For In A Property

Homebuyers differ in the things they look for when buying a property. Some families prefer flat homes with a backyard while some prefer a two-level property. There are young couples who like to live near the beach with views of the water while the others opt for an apartment near the city center.

The latest data from Realestate.com.au shows the top five things buyers look for when searching for a property. These are based on the top search terms on the site this 2017. On top of the list are pools, granny flat, waterfront, views and beach.

Pools
Swimming pools have always been an attraction to many property buyers. They provide a space for rest and relaxation particularly on hot summer days. Real estate experts have also confirmed that the presence of a pool increases a property’s value and gives a great return on investment when sold.

Swimming pools are in demand in Australia. Homeowners in areas with warm climate such as Perth prefer to have pools in their homes. Many Australians also like resort-style outdoor spaces hence, the demand for pools.

Granny Flats
The granny flat is also in great demand today owing to its versatility. It should be noted that this residential property is not restricted to just the grandmas and grandpas as it is also a top choice of parents whose older children still live with them.

Financial and construction specialists in Australia have confirmed that many homeowners are converting their backyards into granny flats for additional income and to avail of tax deductions. Empty nesters take advantage of these flats and rent them out to earn extra income. But apart from the rental income option, a well-built granny flat can add value to the overall residential property. Its cost is added to the property’s price since it cannot be put on a separate ownership title and therefore, cannot be sold separately.

Waterfront, Views, Beaches
Properties close to the beach are also on top of the most-searched list. Fantastic nature views particularly those of the ocean and a property in a waterfront location always provide a great feeling of comfort and relaxation. Additionally, it’s easy to hit the beach whenever you feel like taking a dip in sea water on a hot summer day or any other day you feel like taking a stroll on the sand.

These five features add financial and emotional value to any home, according to Hockingstuart senior sales consultant David Sullivan. They are guaranteed to improve the lifestyle of homeowners and give them significant profits when they decide to sell the home.