5 Essential Features That Make Real Estate Investing Profitable

Categories: Home Remodeling

Ten decades back, a search for the property would have begun at the office of a local realtor or by simply driving around town. At the agent’s office, you would spend a day flipping through pages of busy property listings from the Regional Multiple Listing Service (MLS). After picking properties of interest, you’d spend many weeks touring every property until you found the right one. Finding market data to enable you to estimate the asking price would take more time and much more driving, and you still might not be able to discover all of the information you had to get very comfortable with a reasonable market value. 

Today, most property searches begin on the Internet. A fast keyword search on Google by place will probably get you thousands of results. If you spot a property of attention on a property website, you can typically view photos online and maybe even take a virtual tour. You can then check other Web sites, such as the local county assessor, to get an idea of their property’s value, see exactly what the owner paid for your property, assess the real estate taxation, get census data, school information, and even check out what stores are within walking distance-all without leaving your house!

While the tools on the Internet are convenient and helpful, using them correctly can be a challenge due to the volume of information and the difficulty in confirming its accuracy. At the time of writing, a search of “Denver property” returned 2,670,000 Internet sites. Even a locality specific search for a property can easily return thousands of internet websites. With all these resources online how can an investor effectively use them without getting bogged down or twisting up with incomplete or poor information? Believe it or not, understanding the way the business of real estate functions offline makes it a lot easier to comprehend online real estate information and approaches.

Now and then persons trying to make up their minds where to place their money ask me if real estate ventures are more or less profitable, compared to additional business opportunities around.

My response is always that besides its potential for yielding substantial gains, investing in real estate frequently hastens long terms benefits.

Here are the beginners guide on real estate investing. I discuss five such advantages below:

1. You May Refurbish (to Improve the Value of) Real Estate

Once you buy a stock, you hold it for a time period and hopefully sell it for a gain. The achievement 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 yields, is dependent upon third parties (e.g. business direction), real estate investments are directly under your control.

Even though you won’t be able to control changes that may occur in demographic and economic facets or the impact of nature triggered modifications, there are lots of other aspects which you can control, to increase the returns on your investment in it.

Examples include aspects about adding fixes or improvements/enhancements into the physical property and renters you allow to reside inside.

Should you do it correctly, the value of your investment will grow, leading to increased wealth for you.

2. Real Estate Purchasing, When Done Right, is Proven to be Profitable Even Through a Recession (such as the one we’re in right now)

It has on many occasions, been utilized to effect a bailout, from financial reverses, such as the ones that many have undergone throughout the economic recession happening in Nigeria today.

A considerable number of customers have confided in me due to the current financial situation, they’re not sure of lucrative channels to invest their money. Some of them are done with bonds and treasury bills but are in desperate need of new investment.

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

This is because, even if all businesses crumble, the land will always appreciate considerably. Then to drive my point home, I stopped by discussing the next apt quotation, with a former American president

“Real estate can’t be lost, nor taken away, managed with care, it’s all about the safest investment on earth” – Franklin Roosevelt.

Unsurprisingly, the customer opted to take my information and signed up: it had been the obvious, common sense thing to do!

3. Real Estate Investments Are Immune to Inflation

In other words, investing your cash in ownership of viable property can protect you from the harsh effects that inflation generally has on other conventional investments.

This is because the value of real estate generally tends to grow within a positive correlation with inflationary pressures. This is why property values and rental prices go up with increasing inflation.

The character of the real estate therefore affords owners the exceptional benefit of having the ability to adjust the rates they supply, to match inflation.

Monthly rents by way of example can be raised to compensate for inflation – thus offering a cushion impact against inflation induced losses that other monetary investments endure.

4. Real Estate is Uniquely for Being Universally Acceptable as Collateral, Towards Securing Funding from Banks

Today, property in form of buildings or lands, together with proper titles (i.e. Certificate of Occupancy – aka “C of O”) is the most recognized and accepted form of collateral in Nigeria – and several other parts of the earth.

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

This is one of the critical benefits a personal C so has within the global C so because the prior (i.e. personal C so) is exactly what will be needed by the planning borrower, in the event of any prospective fiscal dealings with the 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 sufficient cash. You just need to know-how.

This is possible because real estate is physical land or what is referred to as a hard asset. That is an attribute that makes it attractive to financiers i.e. people with money to spend.

That is the reason why a lot of times property products are purchased with debt – unlike traditional investment products like stocks that aren’t tangible and therefore perceived as being riskier to invest in.

So property investment could be achieved using cash or mortgage financing. In the latter case, payments can be so arranged to permit payment of low initial amounts, given by you or a willing third party.

Those payments will be happening on the landed property that will continue increasing in value during the duration of such obligations – and really beyond. That further inspires confidence in the heads of those funding the acquisition, that their investment is safe.

Little wonder that real estate investing has continued to flourish for so long!

[A WORD OF CAUTION] The listed benefits notwithstanding, I still tell prospective investors that due diligence is a vital requirement for achievement.

Whether you do everything yourself or use business professionals like me, you must exercise caution and equip yourself with pertinent information and education.

This is something I counsel my customers to do all of the time so that they could make good decisions in investing.

The value of the above cannot be overstated, especially in Lagos where quite a range of people, have had their fingers badly burnt, since they neglected to take the necessary precautions.

My objective is to help clients avoid having such dreadful experiences, by attracting my years of experience in this field to bear in serving them. Click here for more real estate investing advice.