In a bid to attain financial stability, many search for proper investments with their income. Real estate is one of the most robust investment options, especially in the long run. , these are the reasons you should take advantage of this robust investment option and invest in real estate.
Real Estate is a Hedge Against Inflation: Real estate is one of the few assets that react proportionately to inflation. As inflation goes up, housing values and rents go up. For this reason alone, therefore, real estate is one of the best ways to hedge an investment portfolio against inflation.
Real Estate is a more stable investment: The property market is usually much less volatile than the share market, at least partly due to the effort required in order to purchase a property – in terms of due diligence, legal checks, inspections, length of settlement periods and so on. This means that property is less prone to short-term speculators than paper asset classes. This – along with the relatively long amount of time it takes to liquidate a property asset – also reduces market volatility significantly.
Real Estate is relatively easy to finance: It may not feel like it when you’re applying for a mortgage, but lenders like property. Home loans are a major part of any bank’s business model, and lenders are more likely to lend on residential property than any other asset class – as evidenced by the fact that they will lend a higher proportion of the value (up to 95%) and at lower interest rates than any other asset class – including commercial property. This makes it a lot easier to borrow to invest in property than in any other asset class.
Real Estate increases in Value due to Appreciation: Historically, real estate has shown to be an excellent source of profit through the increase in investment property value over time. Of course, analysts cannot always predict real estate trends, which vary significantly across Nigeria, especially in Lagos state.
Real Estate Properties Exist in an Inefficient Market: Unlike the stock market, the real estate market is full of inefficiencies. There is a lack of transparency relating to individual property values and also the strength of different markets, which means that real estate investments have the potential for very high profits. Real estate investors who do their research, especially with help from industry experts, can find great real estate bargains.