Investment is not a vague term in Nigeria. You would be surprised to find out someone in your family had invested in shares, stocks or government bonds at a certain time. Who does not like the idea to contribute little money and get quite a large turnover after a period of time? The money can be used to pay for the holiday, a new car or maybe clothing.
Investment means paying a certain amount of money into financial schemes, shares, stocks, commercial institution, real estate holdings or government bonds with the sole aim of making more money. Sometimes the first impulse you have when you get a bank alert is how to spend the money. Over time, however, those amounts that trickle into your bank account can grow into large sums of money if you reinvest in real estate.
- 1 Benefits of investing in real estate
- 2 Renovating a property
- 3 Invest in a new property
- 4 Invest in REITs
- 5 Invest in home construction
- 6 Loans
Benefits of investing in real estate
Capacity to influence real estate asset performance
Do you know that you can get things done to a property to increase its overall value? By fixing your rooftop, repainting the interior of the house, decluttering, repainting the exterior and changing the fixtures like kitchen cabinet can add to the monetary value of your real estate holding.
Limited risk of loss
Real estate is a safer investment option compared to shares or stock which is often unstable, hence, the risk value is higher. Generally, in relation to land, your danger of risk is limited by the time span you own the property. At the point when the real estate market appreciates, so does the estimation of your real estate holding. The flip side of owning shares or stocks is that there are various factors outside your ability to control that can adversely affect your stake negatively. Real estate asset gives you more control has an owner unlike stock as you can benefit from various income streams by renting, selling or leasing your asset.
Land can appreciate overtime
The longer you own your land, the more cash you will make especially when urban development occurs in the immediate environs. Presently, land at Lagos Island has been appreciating over the years due to the rapid level of development in the city of Lagos.
Land is a fixed asset, hence, is usable as a collateral to obtain a loan from the bank. Banks more often than not lean toward land as security since it is known to increase in value, unlike your car which loses it value with depreciation over time. Also, land is physical unlike stocks, bonds and numerous other investment options that are not tangible.
Higher Return On Investment
Higher Return On Investment(ROI) is a huge motivation to reinvest in real estate in Nigeria. Dependent upon the area you invest in, you could be gaining huge profit more than your initial deposit upon investment. However, keep in mind to pick a prime area with social facilities in order to receive more money than the initial deposit upon purchase of the land.
You are your own boss
With your land, you have the entire control over your land with the income and failures. You have control over the rental fee or lease fee per month/year, and who will be your tenant or not. The advantages of putting resources into land settle on you your own particular chief.
Below are a lot of ways to reinvest your money in real estate.
Renovating a property
Changing up the appearance of an already existing property by renovating it can be quite rewarding. Create a budget for the cost of your renovation before you begin.
Invest in a new property
You can get a land cheaply at an affordable price. You will be surprised at the value of the property in just a few years time.
Invest in REITs
It has become very possible to invest in real estate without holding a physical property. REITs( Real Estate Investment Trust) let you do exactly that while also diversifying your holdings.
Invest in home construction
The growth in the real estate market is as a result of housing developments across the country. Investing in the construction sector can be rewarding.
Hard money loans are a direct loan to a real estate investor. Hard money loans directly to real estate investors are another strategy to consider if you want to invest in real estate without having to deal with a property.
Kindly share other real estate investment options with other PropertyPro readers below.