In today’s economy, real estate is the one of the safest investments you can make and the reasons are not far-fetched. The need for shelter is endless in the world and the shortage of good and affordable accommodation in Nigeria keeps pushing up rent and property prices making it a stable and consistent means of income for any property owner. The boom in Africa’s real estate market is a juicy opportunity for entrepreneurs to exploit and become successful property owners. The following below are some more reasons why investment in real estate is of great benefit.
- STEADY CASH FLOW: when you buy or build a house, and rent it out to tenants, that property starts to earn you rental income. With the high demand for accommodation and inflation, rent prices are always on the rise and this means more income. Compared to other investment instruments, the income from real estate is the steadiest. For example, the amount of dividends paid by many companies often fluctuate and may not be paid every year. Bank savings (another form of investment) usually attract interest payments that may be steady but are often very small compared to the returns you can get from investing in real estate.
- USABLE AS LOAN COLLATERAL: Access to loans is one of the biggest obstacles faced by entrepreneurs in Nigeria. When banks ask for collateral, they want something that is equal to or greater in value to the loan amount you are asking for. Banks usually prefer real estate as collateral because it is known to continually appreciate in value. Unlike your car which loses value every day, the value of real estate properties are more likely to grow. As a result, an investment in real estate means that you can use the properties as leverage to get a loan from a bank and other lenders.
- HIGH RETURN ON INVESTMENT: Real estate always appreciate in value. Due to the huge demand for shelter in many African cities, the returns on real estate investment are one of the highest in the world. There is also an unavoidable connection between the current health pandemic and a looming hunger pandemic hence this is the best time to invest in real estate for agricultural purposes.
- LOW RISK INVESTMENT: Stock market can crash and banks go bankrupt, even if real estate value falls, it is not usually a very bad situation. In fact, even when property value fall, you would still earn rent income from the property. Another benefit is that real estate is physical and tangible compared to stocks, bonds and many other intangible forms of investment. Both in times of high inflation, economic highs and lows, real estate investments remain robust and will most likely continue to earn you income.
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