Real Estate

What is real estate?

  • Real estate is the land with any structure on it whether natural or man – made features 
  • It is a form of physical and private property
  • It is different from personal property as these are not permanently attached to the land; such as vehicles, jewelry, furniture, etc
  • Examples of real estate are houses, farmland, etc

Why should you buy real – estate?

  • Real Estate appreciates in value over time, with a good investment; you can profit by selling it at a high price 
  • It can easily be turned into a passive income asset; for example constructing multiple houses and renting them out 
  • Take out a loan to buy house 1. Rent it out which will pay the Emi’s partially. Once it’s paid off., purchase house 2 and rent it out as well. Rent’s from both houses will pay for house 2. Repeat till one reaches house 5 or 10 as per risk appetite.
  • The above also gets a tax benefit called negative gearing. The interest paid to the bank is deducted from ones income when calculating ones taxable income.

Pros and Cons of Real Estate

PROS

  • Appreciation: real estate appreciates the most over time, about a 3.8% value increase per year
  • Good Cash Flow: an asset that can easily be converted into a passive income source and provide good cash flow; it is also tangible (100% ownership), which increases your profits: increasing rent of your real estate
  • Not Risky: low – risk investment due to its high demand and popularity (approximately 65% of the world population has some real state property)
  • Inflation Hedge: good hedge against inflation due to its limited availability and high demand; and rising

CONS

  • Purchase and Maintenance: money is required to both purchase and maintain the property to maintain its aesthetic value (value of object by its physical looks)
  • Time: even though real state appreciates the most in value, it takes years for it to be at a high price
  • Long Term Investment: real state is an asset that cannot be quickly sold in cases of an emergency. It takes time to find a good buyer and also sell the property (it takes about 2 – 3 months)

Institutions in Real Estate –

The links below are government – authenticated real estate brokers where you can learn more real estate, and also invest it – 

Summary

  • Before buying any real estate, research carefully about is prices, geographical features, etc
  • Always find potential buyers before buying real estate to sell it as fast as possible during an emergency situation
  • Turn your real estate into a passive income source; such as renting it out
  • Keep buying real estate and turn into a passive income source to purchase more properties and other assets
  • Monitor the land properties to improve or maintain it on a weekly basis to increase its aesthetic value
  • Monitor real estate prices to know and inference if land prices are increasing or decreasing