1 October, 2020

WHAT YOU SHOULD KNOW ABOUT REAL ESTATE INVESTMENT

A beginner's guide to investing in real estate - what to know and how to get started.

For years, the concept of investment has been perceived as an upper-class whim – a habit formed in the excess of wealth. No one is to blame for that because, in truth, investment was a rich man’s ability. Although it was a venture to acquire wealth, it required a lot of money to spare for a long time – something the average person cannot afford. Luckily, with the advent of Fintech solutions, investment opportunities have been able to reach farther with the help of crowdfunding and financial education. But with all the opportunities and exposure this has brought, many are yet to discover the cash cow that is REAL ESTATE INVESTMENT.

“90% of millionaires become so through real estate.” – Andrew Carnegie.

Real estate investment, to many, means owning property and while they are not wrong, their definition doesn’t account for other means of investing in real estate asides from becoming a landlord. Because of this, and the cost of landlordship, many still perceive real estate investment as an upmarket endeavour.

Here’s a look at some of the leading options for individual investors:

RENTAL PROPERTIES: Investing in rental properties means buying and investing in property and letting them out to people for rent. This type of investment is hands-on and would require you to be aware of the processes involved. Although this comes with a lot of burdens (maintenance), at least the property is yours till you decide otherwise. Rental properties also are a form of passive income as the returns come in on a monthly/annual basis. It is the most known form of real estate investment.

RENTAL PROPERTY PLATFORMS: Property Pro, Nigeria Property Centre, Brickstone Nigeria.

REAL ESTATE INVESTMENT TRUSTS (REITs): Real Estate Investment Trusts or REITs are your best option to invest in real estate without owning one. REITs are companies that own and manage income-producing real estate. REITs rely on investment pools to acquire properties which is where you come in. You get to sponsor the building and management of real estate. This is for people who cannot afford to buy or can but want to avoid the hassle that comes with property management. You don’t get to own the property with your investment but you get to earn returns. REITs are affordable and do not require paperwork. Unlike other types of real estate investment, REITs give you opportunities to invest in non-residential properties, such as malls and offices. Also, REITs are highly liquid because they are exchange-traded so you can opt-in and out easily.

REIT Platforms: Cofundie

PROPERTY FLIPPING: Flipping properties involves buying, fixing and selling for a profit. Although it requires a lot of resources, flipping houses is arguably the most profitable Real Estate investment venture as it requires buying real estate at an undervalued price.The key is to look into rapidly developing areas.

LEASING: Leasing can be approached from two angles. You can either buy property and lease or you can enter a long term lease for commercial properties and release for a profit. Platforms like Airbnb are very useful to his investment suite.

WHY REAL ESTATE INVESTMENT?

Real Estate Investment comes with a plethora of advantages that are hinged on the nature of the products. It serves a channel for steady income. It is a great place to put your money because real estate value appreciates over time. And because of the positive relationship between real estate demand and GDP, you are sure your money is immune to inflation’s glare.

YOUR BEST OPTION?

Depending on how much money you are willing to invest, you can either go into REITs or other investment suites. However, with REITs, you don’t have to worry about the processing or management of the property. Also, it’s the cheapest and the most fluid – you can opt-in and out any time.

Cofundie offers the best option when it comes to affordable and profitable real estate investment. In 3-clicks you can sponsor the construction of homes and enjoy returns from sale or rent. Click here to get started.

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