Investing in real estate is gradually becoming a popular idea, even among young investors. That’s because some of the best real estate investments provide a steady stream of monthly income while also increasing wealth through long-term wealth growth. Therefore, compared with many other investments, real estate investments are unique, with unique characteristics in style, content, and operation. However, real estate investing has some unique and lesser-known features that investors must carefully understand before making an investment. They will help you develop profitable strategies to take advantage of these unique characteristics while avoiding the potential pitfalls associated with real estate investing. Africa Housing News brings you some unique attributes of real estate to keep in mind when considering investing in the current large corporate market.
1 Durability
Real estate investing can be very longevity and build wealth for generations. In contrast to other fixed-term investments, real estate investing does not have a fixed term. If you see a good opportunity, you can sell it in a few days, or hold it for decades. In cities in Georgia such as Tbilisi, Batumi, and other developed countries, many of the most profitable properties have been held for years.
2 Lack of transparency
Some markets, such as stocks and commodities, are regulated to be as transparent as possible. Investors have access to real-time market information and can make changes to their portfolios on the fly. Real estate works very differently. When an investor buys a property, there is a risk that the seller is withholding information or that the seller is unaware of the problem. Therefore, research and inspections are important when purchasing a property. In Georgia, it’s easy to get all the information about any property with little clicks online.
3 Heterogeneity
Location, location, location. All properties are local, and each property is unique in location, physical structure, and financing. As a result, investors can leverage the local knowledge of the community to acquire and manage a highly profitable real estate portfolio. For this reason, due to the heterogeneity of real estate, the most successful investors have a team in each geographic area in which their real estate invests. In our company “Investwindow.com” we can provide you with the most experienced team in real estate to support you in your decision, and to make your life easier to manage your properties.
4 Illiquid
Real estate is considered illiquid because it can’t be easily sold without a substantial loss in value. Even if you are flipping houses, it takes a substantial amount of time to purchase, rehab, find a buyer, and close. And if you own rental income with tenants leasing a property, it can take much longer. Our investment consultants recommend that the lack of liquidity is a good thing, though, when it comes to investing in real estate. The illiquidity of real estate contributes to making it a stable, appreciating asset class for long-term investors.
5 High Startup Costs
The costs of acquiring real estate investments are higher than many other types of investments. Typical costs include purchase and closing costs, rehabbing, and financing. The adage, “it takes money to make money” applies to real estate investing. But the reward is high in the form of cash flow and profits. Like illiquidity, the high cost of acquiring a real estate investment is one reason property investing can be so profitable, especially in Georgia as we can Georgia is a startup country in the real estate development field. The costs limit the number of investors in this asset class and therefore add to stability and long-term appreciation.
6 Investment Vulnerability
Risks associated with real estate make investing in this asset class very profitable for savvy investors who have a proven plan for success. Real estate investments can be fluid at times and change as cities (Tbilisi, Batumi) and neighborhoods change. Therefore, real estate is not a hands-off static investment, but one that requires constant attention. The best investors either personally manage their investments, or hire an expert team to locate, rehab, and manage real estate investments on their behalf. From the above, one can see that real estate investments have unique characteristics that can enable a smart investor to make a great deal of money if he knows how to leverage these characteristics to his own advantage. Contact us for more.
