Is real estate investing a good way to build wealth?
Real estate investing will always play an important role in our lives. It does not just serve as a basic fundamental need, it also contributes to the well-being of society at large.
It has a direct correlation to the healthy growth of businesses, communities, economies and countries. For example, a business that owns landed property or a building can use the property as a collateral for a bank loan. Land ownership by communities is percieved as a means to economic growth over time.
In many countries, real estate investing is regarded as a triple A-class investment vehicle. In many situations, it has been able to appreciate at a faster pace than inflation, allowing it to contribute to asset preservation and expansion.
Property investing returns are often higher than inflation and more profitable than many other types of investments. If you’re a smart investor, you may get a good return on your property investment by using loans and other sources of cash.
To increase returns from your property, you can make improvements to the property and its uses. As pointed out in the example above, the property can be might be utilized as a collateral to free up funds for additional investment or in an emergency.
It’s no coincidence that property investing has helped many peple globally become millions, either directly or indirectly.
Many intelligent investors will tell you that real estate investing has made them more money than their salary, savings, business earnings, and returns from other investment products.
You will be able to live a higher quality of life if you have a value property and a good tenancy agreement in place as you will not have to continuously watch your investment or be overly concerned about big price changes if you have in place a decent tenancy agreement.
When you leave a property asset to a beneficiary, the beneficiary will be in a better position to manage it than, say, a business or an investment instrument that takes specific knowledge, expertise, and professional attention to operate.
It is a given that almost everyone involve in property investing at some point during their lives whether buying or renting. In Nigeria for example, according to worldpopulationreview.com Nigeria’s population is projected to reach 400 million+ by the year 2050. In 2021, people younger than 19 make up a majority of the country’s population. For both males and females, the median age of the country is actually 18.4 years of age.
It is inevitable that more and more Nigerians would continue to need land. Living in a property is a necessity, a part and parcel of our lives.
As a result, there’s no doubt that people should study about real estate investing and be relatively competent in making the best decisions to protect themselves from dangers and liabilities while also increasing their returns on investment.
The unfortunate reality about property investing is that many individuals are uninformed about property investing
According to research, a lack of financial intelligence may lead to a chain reaction of negative consequences, including needless debt and other negative consequences for their families, communities, economies, and countries.
It is therefore important that you educate yourself on the industry, its niches as well as getting some financial management education before venturing into real estate investing.
The real estate industry is large, and within each of the broad real estate segments (Residential, Retail/Commercial, Office, Industrial), there can be many levels of activity (or niches), each with its own set of tenants, landlords, builders, investors, lenders, brokhers, syndicators, managers, and service providers (much like layers in a cross-section of rock).
Each layer provides a person with a spot where they may become prominent in that niche, allowing them to get chances before they are made public), while someone prominent in one niche may be relatively obscure to someone active in another.
For instance, someone that is good at buying and selling distressed single family residential property locally may not know a single person involved in the niche of buying and selling post offices ground-leased to the federal government, or one involved in acquiring distressed rental equipment yard, or one involved in investing in hydro-electric power plants.
As such, it would be a mistake to assume that simply because someone is succeeding in each of these niches, everyone else is succeeding as well.
In a nutshell, property investing can be very lucrative. However, there are inherent risks and dangers with this, as with any other instrument of investment. As a result, it’s critical to have the necessary skills and education in property investment in order to make a good return.
