Real Estate investment is no doubt one of the investment opportunities that yield very high dividends. Due to the high returns on investment, a lot of people are interested in investing in real estate. However, there are certain things that you need to know before venturing into real estate investment. Some of the terms used in real estate and investment opportunities that you need to know about, have been listed below:
Do Not Rush: When you are thinking of investing in real estate, it is very important that you do not rush. Take your time to go for inspections and check all the choices available to you. Do not allow any realtor to rush you into making payments if you are not sure of what you are buying. Be very careful and if you have the means, engage the services of a property lawyer.
Consider Property Development: Property development is an aspect of real estate that is also very profitable. In this aspect of real estate, you can either buy a piece of land and lease it out for a profit or you can decide to build a property on it for commercial purposes. You can buy a building and convert it into something else so that you can use it to generate income e.g. buying a mansion and renting it out to a company or a school.
Know Your Market: It is important that you know your market before you decide to start any business. Investing in real estate is no different. It is important for you to know the value that a property will generate if you decide to invest in it. Knowing if the area where you intend to buy your property is profitable is very important. For instance, in Lagos, places like Lekki Phase 1, Ikoyi, Victoria Island, Magodo, Ikeja G.R.A, Maryland and Gbagada are areas with very high profitability ratios.
Start Small: If you intend to start real estate investment, it is advisable that you start small. Starting small will enable you to minimise risk if the investment goes south. You have the opportunity to learn from your mistakes before you decide to move on to bigger investments. You can start with building houses in random places and reselling them or renting them out and later move on to building estates and apartment buildings.
Property Flipping: Property flipping means buying a property for the sole purpose of reselling at a higher price for a profit. If you are considering real estate investment, property flipping is one of the options that you can consider. You can buy a property and resell it later at a higher price for a profit.
Use of REITs: Real Estate Investment Trust (REIT) means a company that owns, and operates income producing real estate assets or properties such as office buildings, residential buildings, shopping malls, tourism related facilities, healthcare facilities, industrial facilities, infrastructures, and warehouses, whose shares are publicly traded in a way similar to any other stock (https://www.globallawexperts.com/NewsArticle.aspx?PID=2007). If you are thinking of investing in real estate, you can invest in REITs. They are just like stocks; you receive a dividend when profit is made on any of the properties you have invested in through REITs.
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