Real estate as an alternative investment
Ownership of one or more properties that are assets is desirable by many. This type of asset can effectively „feed” the investor in the event of commodity or financial market crises, even temporary falls in real estate value are not as severe as the collapse of other markets.
Well-managed properties provide asylum for the investor – shelter. Investors who already have several premises or buildings do not need to be persuaded about the advantages of real estate, they are well aware of it – this type of investment can be a problem for someone who is sceptical or for someone who hesitates to jump into the real estate world.
Investing is not risky, the lack of knowledge is risky. In the case of real estate, this problem is very visible. Average investors are afraid to invest in real estate, because they do not really know how, and thus lose great investment opportunities. Turning a property can be compared to driving a car: there is a risk, but the driver can’t be risky if he exercises the right driving is a really good driver.
The same applies to the investor: if he or she reaches legal and tax regulations related to real estate and gains experience in searching for investment opportunities, he or she will cease to be a risk agent and become a wise and efficient investor.
So what can you do to become such an investor and take advantage of the opportunities offered by the real estate market?
First of all, you have to stop claiming that you don’t have money to buy real estate and start taking care of shopping. Many men are surprised why women go to shops even when they don’t want to buy anything – because they will know what to buy if there is an opportunity and they will have money to buy.
Investment training in real estate is therefore based on the same principles as ordinary’ female’ purchases. It is necessary to regularly review sales offers, visit brokerage offices and call or talk to sellers by telephone or in person. Only in this way can you practice to notice what others do not see. The use of alternative real estate investments also involves tax and legal expertise.
Every investor should be familiar with certain grounds, but it is not necessary to be a tax or legal professional, but should know where to find the information he needs or who to ask for advice (selection of a good legal adviser and tax advisor is quite a challenge).
Only with such preparation can you begin to buy a property without being a risk-bearing agent. The risk I mentioned when driving a car also applies to the real estate market: let’s say that we have a great property in a convenient place, but we were a little late with buying it for rent, because the competition gained a large majority of customers, and we are trying to win more tenants with a poor result.
If we have taken a mortgage loan to purchase this property and we start ending up with money on rent payments there is an increasing danger of the bank seizing our property and for this reason, among other reasons, average investors are afraid to invest in real estate.
As in the capital markets, also in the real estate market, investors are facing declines in the value of investments that are not as large as I have mentioned, for example in the case of housing. On stock exchanges. Europe is currently at the height of the economic cycle in the real estate market, during which the property development industry has developed significantly.
Because of the ease of access to mortgage loans, people are investing massively in real estate and companies are putting emphasis on building new houses and flats. It should be noted that the population is declining and by 2030 pensioners will account for 25% of the population. Someone who has now invested in real estate may lose out in the long term, because an investor of the capital markets said:”He bought it on top”.
The United States, for which population growth is estimated, is in a different situation. The ageing European population is likely to trigger a wave of immigration flows from the Arab countries and from the eastern border, which will not result in significant falls in property prices in the future. I advise all the’ keen’ investors who would now like to invest in real estate, to wait for the price drop, which may soon become bigger.
The property situation is similar to that of the commodity market, particularly in the gold market, with the small difference that the property is located on the edge of the peak and gold before it. It is necessary to be interested in these spheres, but I would advise all investors planning to buy from far away not only from the gold market, but also from the real estate market.
What is alternative investing: