Most other investment products is heavily influenced by outside factors. For example, prices in the stock market can go up and down rapidly even significant because of the issues or gossip about politics, government policy, national security, economic conditions, or as bond prices fall when inflation and interest rates rise. Compared to property, although also affected by external factors, but changes are not too fast, for example, house prices certainly cannot be changed just in one day, but it takes years.
Advantages of Property Investment
When investing in property, you have the chance to get a great return of investment. If you see Donald Trump, an American property businessman, or other property businessman, they are rich from the property business. Banks also have the property, if we consider high rise headquarters building is magnificent, not to mention dozens of branches.
There are many ways to invest in property. You can start by buying a house, shop, build a rented house, other commercial buildings or vacant land. Of all these options, buying and selling a rental home is better for those newly begin to invest in property, then a little saving from the lease to be re-invested. If you notice a lot of people interested in making a rented house because by being landlord lets you have a treasure that you can control yourself, then sell it later. The good news is you do not need much to start your investment in property.
It is important to understand why the property is often the primary choice of people to develop their wealth; the reason is not because the property is not at risk. Like any other investment, property investment also has constraints such as the tenants are late of paying the rent cost, moved without telling, damaged buildings, whatever difficulties may occur. Essentially if you are willing to bother with the affairs of this sort, then the investment in property is for you.
Using 'Other People's Money'
One of the most interesting parts of the investment in property is that the system created in such a way that allows you to use other people's money to finance your investment. This is one of the most important concepts that make the property can make you richer than other investments.
In other types of investments, the large amount of investment is determined by how much you are willing and able to pay with cash. So to buy another investment, you pay in cash assuming using your own money. We just take the example of investment in capital markets. To buy stocks then you have to pay in cash the entire of the transaction, unless you do the actual margin trading that is very risky. Likewise, investments in bonds, mutual funds, deposits and savings in banks, moreover gold investment, it requires cash payment in full.
Investing in property is not the case, you could pay for the down payment of 10% to 30% of the price in order to have the property first. Then, the rest can be financed from the loan to the bank. Even the developer itself was willing to provide mortgage relief payments for the payment of advances for purchase of goods.
The opportunity to use other people's money in the form of financing is referred to as leverage, or ability to multiply anything. For example, the first day, you managed to get a mortgage with a down payment of USD 30 thousand, and then at the same day directly your cash assets increased to USD 100 thousand. The more money invested the more likely someone else's money or financing that you can get, for example with the money of USD 30 thousand, then you can only buy shares up to USD 30 thousand. But with the same amount of money if invested in property, then you can buy a house worth USD 100 thousand. Where you pay a down payment home USD 30 thousand, then the bank will finance the remaining USD 70 thousand, now you become the owner of a building for USD 100 thousand. That amount is more than three times or 300% double? Fabulous!
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