How to Invest in Real Estate is a question on every investor’s mind. The real Estate Business is a money-spinning business because properties are actually appreciated in this part of the world and have a very low depreciation rate.
This is a safe haven for investment.
But amidst the juicy story behind real estate, you wonder why everybody is not investing in it.
The fact is that real estate investment is capital intensive hence it is not for everybody.
This post is based on research of some real estate investors and how they made their money in real estate.
After careful research, I am able to put together all their thoughts for your consumption.
Have A Saving And Start Small
To invest in real estate the first step is to determine ahead and save towards your first property.
However, it is not easy to save towards investing in real estate because of its capital-intensive nature.
You can embark on aggressive investment to work your way to your target.
Also, any income that drops into your account should be diverted to real estate savings.
Instead of buying the latest car or moving to a better apartment, save the money for future real estate investment.
Once you are able to accumulate a substantial amount of money, invest it in a small property in a suburb somewhere and gradually build your asset.
After buying the land, wait for it to appreciate before you sell it.
Remember that real estate is not a get-rich-quick scheme so you need all the patience you can muster for you to succeed.
You can also put the property for rent or lease and accumulate the income from it.
Take A Loan To Boost Your Savings
From point 1, if you discovered that time is not in your favour or are too scared to put your money in risky investments, approach your bank for a loan to augment your savings.
A mortgage loan is what you need for this purpose.
The bank will ask you to make an equity contribution of a certain percentage say 20% or more before giving you the loan.
One good thing is that mortgage loans have a long repayment period and there is life insurance to protect your other assets or family members in case of death or loss of a job before the loan matures.
Become A Member Of A Cooperative Society
If you are not keen on taking loans, this next point is for you.
You can join a cooperative may be a staff cooperative or any other available one.
Cooperatives use the law of large numbers to a good advantage.
They cumulate members’ contributions to purchase hectares of land to sell to members at a rock bottom price.
Once you are allocated your own plot you can either develop it or sell it at a profit.
Erect A Structure / Building
From point 3, you are better off selling your land with a structure erected on it rather than selling the piece of land alone.
This is so because a piece of land is of less value compared to land with a structure on it no matter how small.
You can price the property higher than the material and labour cost of erecting the structure.
Invest In A Developed Property As Against A Land
The turnaround time of developing a landed property is long compared to an already developed one.
If you are buying for investment purposes it is preferable to buy a house than land.
For one, you will be able to sell or rent or lease it quickly and recoup your money within a short period of time.
this is a term in real estate that means buying land and reselling it quickly for a profit.
You can start with a plot and before you know it you are having more than 10 in your hand.
This method of investing requires your money nothing more and from it, you will be able to make more money.
Imagine having 10 different landed properties to sell?
The income from those lands when sold will be huge.
Open Space Leasing
This is another way of investing in real estate if you buy land for hold or future appreciation.
Say an investor buys a landed property in a very good location and leases or lets it out for temporary use while he waits for it to appreciate.
Such investor leases the land to a church, event or party organizers, and so on.
The rent or income from those transactions can be used to develop the property much later.
Honest Developer Or Agent
You can use the services of a developer or estate agent who knows his salt.
They are professionals who can help you with your buying and real estate investment decisions.
They have more experience and knowledge in this area, they can even help you locate good properties you can buy or sell.
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