There are so many businesses that one can he dodge into when need to start up a business arises. Real estate investment is viewed as one of the investments that you can never go wrong on. It has been existing overtime and it’s one of the businesses with massive profits and huge opportunities if well taken care of. The industry consists of different areas or categories that you can invest on, that is; residential category, commercial category, retail category, industrial category and a mixed use of all of the above. Due to these various categories of real estate investments, this creates a niche and various gaps of opportunities. This article is therefore going to help you know why real estate investments is one of the greatest industry that you can invest in. According to the survey by Kenya National Bureau of statistics, it shows that real estate investments rose by 1.2% between 2018 and 2019 financial year. Here are some of the reasons why investing in real estate industry is one of the best ideas.
High profit margins
According to Cytonn, this sector has out done other asset sectors. In the last five years, part of this industry such as serviced offices contributing up to 12.3% per annum. Real estate investment generates profits in different ways such as money from rent outs, money from flipping, money from industrial use as well as money from lease. The rate of profits generated in this sector are high end and that is why the whole industry consequently has high capital investments. Cytonn also states that between 2019 and 2020, average rental and commercial yields, marginally rose from 5.0% and 7.5% to 5.2% and 7.8% respectively.
Acquire wealth
Investing in real estate can be a means to acquire wealth. The property involved in real estate industry, appreciates in value and is a means of storage of wealth. The property can also be used to acquire loans as they can be attached as security to such loans.
Guide Investors on inflation
Real estate investments A very low chance of variance. Inflation erodes the wealth of investors and they’re very keen to protect that. Of the ways in which investors guard their businesses, its by protecting the investment against negative effects of inflation. Real estate investments act as a shield for negative effects of inflation. The value of the assets grows in the same rate of inflation or either at the higher rates.
Conclusion,
Real estate investment is one of the ways to accumulate wealth. Investing in this industry, has to be one of the best ways to use the money. It ensures safety to your money, it protects you against inflation as well as having high return of profits. Although it may require huge capital, the returns are equally huge. It is an industry that has been existing, and over the years the value increases.