The Philippine population is growing, and this signals a positive demand for the real estate market.
Real estate is considered as one of the top assets in the country to invest in. With a growing population every year, shelter is naturally a basic necessity. There will always be a need for it, no matter what happens. This means that investing in real estate ensures a future profit.
Advantages of Real Estate Investing
Investing in real estate is not without risks. No investment guarantees a 100% profit-and-loss policy. Nevertheless, real estate offers a combination of benefits that are not typically present in other types of investments. Here are the five advantages of real estate investment:
Investors have a hold and control of the physical asset
Real estate is a tangible asset that can be seen, touched, and used. It is more concrete compared to other investments like stocks, bonds, or even deposits, which are essentially pieces of paper. It also gives investors control over the property, allowing them to use it for any purpose they deem appropriate. They may make improvements, develop new buildings, change tenants, and the like.
Real estate values increase over time
There have been some periods where property values decreased in the country. This may be influenced by economic structure and performance, but the overall trend is always up. Like any other good, real estate’s value is determined by supply and demand.
A source of passive and steady income
Purchased properties that are offered for rental use provide owners with positive cash flow every month. These range from lands on lease to commercial or residential units for rent. Investors will likely have a solid investment from the beginning and for many years to come.
Leverage and tools for financing needs
Unlike other investment instruments, real estate can be purchased at once or paid in installments. Some companies and developers allow the utilization of property upon a downpayment of a certain amount, as agreed. Condominiums, for instance, can be offered for lease or rent even if the owners have not fully paid for the unit. In addition, purchased properties can be used as collateral for a loan when owners need capital or cash to grow their businesses. This implies that investors can already earn while still paying for their property, as in the case of partially paid real estate. Or, they can borrow against their assets to continue investing.
Diversification of the investment portfolio
Diversification is known as the practice of spreading assets into several types or categories. The goal of this strategy is to reduce the exposure to risk of investments. It is also one of the best ways to maintain the potential for growth. Real estate, of course, is a great addition to any investor’s portfolio.
Conclusion
Investing in real estate can be a great way to earn passive income and increase one’s wealth. It grows over time and therefore should be treated as a long-term investment. It is not suited to people who want instant returns. Since the Philippine real estate industry is relatively young, this implies potential growth for interested investors.
