Real estate investment is the purchase, management, and sale or rental of real estate with the intent to make a profit, whether immediate or long term. Real estate appreciates over time. Property bought four years ago has more value now if you intend to sell it and the more you leave it year in, year out, the more the value appreciates. If done right, real estate can bring you a fortune and be the beginning of generational wealth. However, you can easily make these mistakes if care is not taken or you lack the right information.
Not taking time to get adequate information
Not all property is good to invest in. Sometimes, the problem is also where the property is located. If you buy a property as a means of investment in a place that has not much value, you may find it difficult to sell or make your money from it. This is where adequate information comes in. You need to have the much-needed information before investing in any property. Do your research and due diligence so it doesn’t end as a waste of money or property that yields little or no value.
Meeting the wrong property vendor
There are many fake vendors out there posing as real estate sellers. If you meet them, you’ll be wasting a lot of resources on them. This is why property companies are highly recommended. At least, you know the person you’re dealing with has a structure.
Being ignorant of all documents involved in buying a property
If you want to buy a property as a first-timer, research all documents you are supposed to be given. Better still, employ the services of a property lawyer. You may end up losing your property to land grabbers if you don’t have the complete or original documents.
All of these mistakes are mostly made by investors buying a property for the first time but you can avoid them if you are properly informed.
Now, let’s look at the pros and cons of property investment:
Steady cash inflow
Real estate is a gift that keeps on giving. Investing in rental properties will keep yielding a return on investment all year round. Some landlords prefer monthly payments. Now imagine having 3 or more tenants paying into your account every month. That should make anyone happy. This also applies to an investor leasing out a property.
If your property is on government-approved land, you have nothing to worry about. Your investment is permanent and will continue to yield profit forever. You can rest assured of financial security for a very long time.
The value appreciates
When you invest in a property like land, it keeps appreciating yearly. Take, for instance, Ibeju-Lekki. Ibeju-Lekki was not a hot cake a few years ago but then, look at it now, it is one of the most sought-after places in Lagos when it comes to buying properties.
You can decide to keep it for as long as you want
For people who would like to keep something worthwhile down for their children, this is best for you. Investing in property for keeps is a great option with a great financial benefit. Imagine buying land for 500,000 when your child is still 2 years old only to hand it over when he/she turns 25. Imagine how well it would have appreciated in a space of 23 years.
It doesn’t have to move with you
Unlike other valuable property you may need to sell off or gift out if you are relocating abroad, land and structure property do not have to be disposed of in that form. You could decide to make it yield in absentia. For instance, rent out the structure or lease out land to farmers.
Anyone involved in property investment should know that it cost so much to maintain unless you don’t mind having a property looking awful, of course, this would affect the value being placed on it. For example, rental property.
It involves a large capital
Property investment is no joke. You could empty your account just to invest in property and this doesn’t mean you would get the returns in multiples almost immediately. It takes a while for properties to give you a much-needed return.
For a rental property to yield the money invested plus profits, it would take some years as well. So, when you heavily invest, you also need to consider that patience is a virtue.
In short, property investment is worth every bit of it. It’s an investment you can rely on come rain, come sunshine. If you have not considered it before, I guess it’s time you start thinking about it, and take that step!