We honestly believe that investing in real estate is one of the best ways to earn multiple streams of income, save up for retirement, and build diversified investment holdings and financial security. We have proven over time that real estate investment is the best form of investment because it affords you the opportunity to use people’s funds (rent) to recoup your investment while increasing your monthly cash flow concurrently. I believe you are getting the hint.
A lot of people especially in Nigeria have so much money stashed in the bank yielding little or no interest year after year. It obvious that many Nigerians are not quite literate when it comes to real estate investment. Here, we have carefully put together 5 top reasons why investing in real estate is a good way to keep increasing your net worth.
1. Wealth Creation
In time, carefully and strategically picked real estate investments will become a sure means for wealth creation. Like I hinted earlier, the value of your investment in properties increases, while the corresponding loan or mortgage financing is reduced nominally through consistent mortgage repayments. This will obviously result in increased equity and overall growth in net worth. With this, you are on your way to living your dream life, giving your family the best of life and creating a better society for all. Isn’t this the craving of any reasonable man?
2. Appreciation in Value
Landed properties are the kind of asset that maintains an upward sloping curve in terms of value. Between 10 to 20 years, most well-situated properties often show multiple appreciations in value. As long as a property is in a prime location, the possibility of multiplying in value in a very short time is very high. Even when a property is not superbly located, as long as the area is accessible and has development attraction potential, it will definitely go up in value over time. Assuming you invest in a residential property, it is really good to know that all you need to take your price a little up is by just providing few extra high-on-demand home facilities. Appreciation is among the many reasons why real estate is one of the safest investment options out there. Unlike, majority of other investment portfolios, real estate has the highest chances of appreciation. When you invest in residential houses, not only do you receive rental income every month, but you will earn a huge profit whenever you decide to sell off the house in the long run.
3. Continuous Flow of Passive Income
Property rental is one real estate investment that ensures a steady flow of stress-free income on the short term. Property owners receive rents monthly, quarterly or annually, this helps them recover invested funds and earn incredible profit over the years. You will agree with me that there is nothing as good as a steady and uninterrupted flow of cash. That is why in business they say “Cashflow is key”. Whether it is residential houses or shops, all you need to do is to ensure you accept good tenants into your property and long as you manage your income very well and commit to expanding your investment, you may never have to be under unnecessary financial pressure.
4. Investment Diversification and Overall Stability
Investment experts will tell you not to put your eggs in one basket. Your investment goal should be to reduce the overall risk of your portfolio through the allocation of funds to various kinds of assets and securities. The diversification of assets helps you to ensure that some portions of your investments are secure and performing well at all times, thereby increasing the net value of your portfolio at any given time in a fluctuating economic cycle. As you may have other investments, some in the probably high-risk portfolio, adding real estate to your holdings will help offset the volatility of other high-risk assets, thereby reducing the overall risk level of your investments, and providing you with more predictable returns.
Many workers, both in the formal and informal sector, public and private sector, sometimes have access to low-interest loans and group funds. A lot of people in such position don’t take advantage of this fund because they often don’t know what to do with it. Let me tell you that investing in landed properties can change your financial fortune. It is clear that using the borrowed fund to improve the earning capacity of investment, makes for full leverage and because landed properties is a tangible asset, funding is usually accessible. The possible return on your leveraged real estate portfolio is substantially increased when juxtaposed with a non-leveraged investment.
Assuming you got a mortgage loan, it becomes a win-win deal for you, when the rental income generated by your landed property is used to repay your mortgage over time. The rent you receive from your property, be it shops or apartments buildings, will usually be enough to offset the mortgage loan and all associated expenses.
You can also leverage your time by engaging a professional property developer and manager like Pacific Shelters & Project Ltd (PSPL) to build and manage your real estate, while you focus on your job or business. In this arrangement, the burden of supervising workers, managing tenants is taken from you, you still earn your full passive income while enjoying professional services. If you need to also leverage your time, PSPL can help you achieve that while you enjoy the maximum benefit on your investment.