Introduction to Real Estate Investment: The Opportunities and Possibilities
Real estate investment is the largest booming business in the world. If you check the league of the top wealthiest individuals in Nigeria and the world, hardly will you find any without a bit of real estate in their portfolio.
About 90% of the world’s millionaires become so through investing in real estate.
Real estate business has proven to be one of the most lucrative business for several decades with relatively high returns on investment. As an individual or investor who desire to venture into real estate, first thing to consider is to define the angle you are making your entry from because there are so many ways of making money from real estate business. Before choosing your investment angle, let’s have a clear view of what real estate entails.
Real estate is “property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more generally) buildings or housing in general.
Real estate investment involves the purchase, ownership, management, rental and/or sale of real estate (land/properties) for profit. Real estate can be a store of value, act as a collateral, as source of rental income, capital growth element and a source of premium. Real estate exists in three basic forms: residential, commercial and industrial real estate.
There exist boundless opportunities in real estate deepening on your interest, especially because it is a booming business. Everybody needs shelter, you be the one to provide. Businesses needs location because it gives them a face, you build and office complex. People need places to have a nice time, so you can give them recreational centers. The places you can put your mouth and money are numerous.
The various types of real estate investment include;
1. Residential/accommodation development
Residential real estate investment involves the acquisition of properties at choice locations (most especially in areas at verge of development), then develop into luxury apartments or places of residency, among others and sell at a high profit margin.
Residential real estate may contain either a single family or multifamily structure that is available for occupation or for non-business purposes. Residences can be classified by if and how they are connected to neighboring residences and land. Different types of housing tenure can be used for the same physical type.
2. Commercial/Market Developments
This focuses on developing commercial outlets such as stores, recreational centers, shopping complexes, office spaces, warehouses, etc. in strategic business areas.
3. Land and Property Flipping
Land flipping involves buying land cheaply and quickly reselling it for profit. In most part of the world, land flipping could be illegal depending on some factors. Also, property flipping could mean that you buy a house, fix it up and the sell for a more reasonable price more than you paid for it. This is legal.
4. Industrial Real Estate
Industries are often considered the staple of the average investor. They generally require fewer investment, are less management intensive and have a lower operating cost when compared to commercial real estate development.
5. Real Estate Consultancy
Now this is the niche of the people! Real estate consultancy is the most popular aspects of real estate business. In actual sense, we may decide not to call it an investment, rather service rendering. It requires you moving around and sourcing for genuine properties, put them off for let or outright sale, advertising your service and helping secure clients for the property owners, after which you will get paid a certain percentage as commission.
Looking at the possible investment direction suitable for you, you can choose which to follow and learn the trade of the pattern associated with that part.
The possibilities with real estate investment are relative to the knowledge you have, in terms of knowing your market, trends and better investment strategy. A considerable factor to being successful also will require consistency in practice and improvement. By this, you practice, make investment decisions, watch how they play out. Fail and learn your way up. It is a game of numbers and accumulation.