Investing in Real Estate: Why Real Estate is One of the Best Investments
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, it’s 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.
