There are various advantages of investing in real estate. Investors can enjoy consistent income flow, good returns, tax advantages, diversity with well-chosen assets, and can be used to grow fortunes.
As the 2022 edition of the Africa’s largest housing event Africa International Housing Show (AIHS) draws nearer, the organizer, International Housing and Construction Show Ltd has listed out 5 major reasons why Africans and those in diaspora must invest in real estate. They include:
After mortgage payments and operating expenditures have been met, cash flow is the net revenue from a real estate investment. The capacity to produce cash flow is a significant advantage of real estate investing. In many circumstances, as you pay down your mortgage and increase your equity, your cash flow automatically appreciates.
Rental revenue, earnings generated by property-dependent economic activity, and appreciation are all ways for real estate investors to profit. Real estate values rise over time, and if you make a wise investment, you can profit when it comes time to sell. Rents also have a tendency to climb over time, which might result in increased cash flow.
Build Wealth and Equity
When you pay off a mortgage on a home, you generate equity, which becomes a part of your net worth. And as your equity grows, you’ll be able to use it to acquire new properties, boosting your cash flow and wealth even more.
Diversification of your Portfolio
When you invest in real estate, it gives you the opportunity to diversify. The link between real estate and other main asset classes is modest, and in some circumstances negative. This indicates that adding real estate to a diversified asset portfolio can reduce portfolio volatility and increase return per unit of risk.
Real Estate Leverage
The use of various financial tools or borrowed resources (e.g., debt) to boost the possible return on an investment is known as leverage. For example, a 20% down payment on a mortgage gets you 100% of the house you want to buy; that’s leverage. Financing is easy to come by since real estate is a physical asset that can be used as collateral.
Meanwhile, If you want to invest in real estate but aren’t ready to take on the responsibility of owning and maintaining properties, a real estate investment trust (REIT) may be a good option. On major stock markets, you can buy and sell publicly traded REITs. Many trade at large volumes, allowing you to enter and exit positions rapidly. REITs are required to pay out 90% of their earnings to shareholders, therefore their dividends are often greater than those paid by other equities. These and other information benefits are what you stand to gain at the 16th edition of the Africa International Housing Show scheduled to hold between July 25 and 28, 2022 at the International Conference Center, Abuja.
Basically, AIHS is a goal-oriented platform that offers the opportunity to network, interact, project, and pitch business ideas to gain increased visibility and patronage.