Real Estate Investing: The Right Way to Invest in Real Estate

With the many benefits that come from real estate investing, it can be overwhelming and intimidating when you are just getting started.

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Minute Read

4 mins

Published

23.10.2021

Many people have come to choose to do investment for various reasons, and the main reason is to protect their finances and assets from inflation in hopes of a greater payoff in the future. With various investments that are out there, real estate is a great and smart investment for building immense wealth as it has a high tangible asset value. 

There are many benefits that come with real estate investing. But if you are just getting started on investing in real estate, it can get overwhelming and intimidating especially with the risks associated with real estate investment. 

So is there the right way to do real estate investment? What are the benefits that come with real estate investing? Learn more about real estate investing in this article!

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But before we jump into the ways to do real estate investing, let’s take a look at the benefits of real estate investing.

Passive Income

Investing in real estate can be a source of your passive income if you rent out your property. Renting out your property is one of the easy ways to invest in real estate. Whether the property is a house, a land, or a building, there are people who could use that space and rent it from you, either for business or personal needs. Which then you will get a stable passive source of income.

Property is a Tangible Asset

A tangible asset means that it has a physical form and holds its value. Compared to other investments such as bonds, stocks, or mutual funds that are intangible assets, having tangible assets is vital because you own the physical form of how much your investment is worth.

Property Value Continues Rising

When the market improves, the value of your home will also improve. In fact, that does not only apply to buildings or houses but also the actual land that it’s built on will be worth more over the years. With higher demand every year, yet less land available, real estate investment shows promising long-term investments.

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Now that you know the benefits that come with real estate investment, let’s move forward on your real estate investment. Lokalist has some tips you can follow to guide you to the right way to real estate investing.

Look for Growth Areas and Neighborhoods

It’s all about location. Capital growth is the main factor in real estate investment, so always be on the look-up for areas located in a strategic location, including areas that are expanding in terms of population, economy, and public infrastructure.

Invest in a Familiar Area

When investing, you should know your potential investment location the way you know your own home neighbourhood. Research the area, everything you need and want to know—from the neighbouring area, living cost, until the capital growth rates. 

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Buying a Property from a Developer

As developers are moving to fill the gaps in the home selling market. Buying a property from a big developer reduces your risk, as most developers build new houses that are easy on the eyes, give a comforting feeling, as well as located in strategic areas that are accessible to toll roads which offer practicality for people’s work and lifestyle requirements.

Adjust Your Budget

The goal of investing is to generate a passive income, build wealth over time, and not burden your own financial plan. So do not buy a property that costs more than your budget; adjust to the budget, and do not let the investment become a financial burden for you.

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Look For a Sunrise Property

Buying a property located in a sunrise property area has great potential and opportunity to grow and develop. Although there might not be too many houses sold in the area, yet, with new infrastructures built around the area, it is predicted to have growth potential and increased demand in the next few years. Sunrise property is usually located in the buffers of capital cities or the outskirts of large cities.

The bottom lineWhen you are out to buy a new home that is designed for your real estate investment, make sure that you are not just looking for all the desirable aspects, but the property itself must have the objective qualities, such as location prospect, safe neighbourhood, and supporting infrastructures, that will help ensure your property’s value.