Homes are a luxury good that most people cannot afford. Banks are leery of lending to customers who might use the money to pay off gambling debts. Mortgages are only suitable for a small portion of the population. People looking for investment opportunities are best positioned to benefit from the lucrative industry.
Real estate is a “weighted” market. That is, different types of property trade at different rates. For example, commercial property tends to appreciate more than residential property. Or, to use the preferred term, “overvalued” property tends to appreciate more than “undervalued” property. This is because most buyers are either uncertain or doubtful as to the market value of the property. They feel safer purchasing property that they know is of a certain quality rather than risking money on a speculation.
Why Would You Want To Bet Against The Housing Market?
Many investors choose to bet against the housing market rather than investing in a property they believe will appreciate in value. Here are some of the main reasons why.
High Return On Investment
If you want to make money quickly, you can’t beat real estate investment. Let’s say you buy a property for £100,000 that you believe will appreciate in value by £10,000 in three years. You make a £20,000 profit on the property – an 11% return on investment per year.
Of course, this is an optimistic estimate. The reality is that you might make only £5,000 profit in three years, which is still a good return on investment. Let’s also assume that the property value doesn’t change at all in the next three years – in this case, you make a £25,000 profit, which is 16.6% in three years.
What’s important to note here is that even if you lose money on the initial investment, you’ll still come out a winner. The reason is that you’ll eventually sell the property for more than you paid for it. This is the definition of a profitable investment.
Diversification Of One’s Portfolio
Real estate investment is a safe, secure, and diversified investment option for most people. You can buy a home that you believe will appreciate in value, and in the meantime, you’re investing in something that you know is worth more in the long run. Most people consider purchasing a property as a sensible way to invest because it provides them with a decent return while also giving them a place to live.
Diversification is important because real estate is such a large and varied market. It makes sense for investors to spread their wealth across different property types rather than placing all their eggs in one basket. It also provides an extra layer of security, which most people appreciate in these challenging times.
Treat Yourself
A luxury good is anything that you can purchase for yourself that gives you satisfaction. A property is a luxury good as long as you pay for its valuation at the end. Not only does this give you the satisfaction of selling something that you believe is worth more than it cost you, but it also provides you with a cash profit. If you want to treat yourself to a home that you believe will appreciate in value over time, you can use this strategy.
Make Money On The Side
If you’re looking for ways to make money, most people advice against investing in real estate. The general view is that you’ll never make money from real estate investment unless you’re involved in the industry, and even then, you might not. But, if you’re looking for ways to make extra cash, purchasing a property that you believe will appreciate in value is a solid option.
Here are some of the top ways to make money from a property investment:
General Fixer-Upper
If you’re looking for ways to make money, most people advice against investing in real estate. The general view is that you’ll never make money from real estate investment unless you’re involved in the industry, and even then, you might not. But, if you’re looking for ways to make extra cash, purchasing a property that you believe will appreciate in value is a solid option.
What’s important to note here is that you don’t need to be physically involved in the property’s renovation to make money from it. For instance, if you purchase a hotel in need of a major facelift, you can offer your services as a general fixer-upper for those who want to rent it out. Make sure that you have the skills necessary to carry out the required renovations – otherwise, you’ll simply be wasting your time. You might also want to purchase a DIY (do it yourself) property to save money – if you’re not comfortable carrying out renovations, you can use the profits to finance the purchase of necessary equipment.
Flooring Specialist
If you’re looking for ways to make money, most people advise against investing in real estate. The general view is that you’ll never make money from real estate investment unless you’re involved in the industry, and even then, you might not. But, if you’re looking for ways to make extra cash, purchasing a property that you believe will appreciate in value is a solid option. What’s important to note here is that not all properties will appreciate in value. In some instances, you might even lose money. But, if you know of a flooring specialist who can install ceramic tiles or vitrified tiles in your chosen home, you can offer your services as a flooring specialist. In this case, you’ll be buying a property with the aim of making money from its rental, rather than aiming to make a profit from its sale.
Landlord
If you’re looking for ways to make money, most people advice against investing in real estate. The general view is that you’ll never make money from real estate investment unless you’re involved in the industry, and even then, you might not. But, if you’re looking for ways to make extra cash, purchasing a property that you believe will appreciate in value is a solid option. What’s important to note here is that you don’t need to purchase the property in order to become the landlord – you can negotiate a lease agreement with the owner of the property. In this regard, you’ll be acting as an intermediary between the property’s owner and tenant. You can make this a full-time or part-time job depending on your requirements.
Repairs And Maintenance
If you’re looking for ways to make money, most people advise against investing in real estate. The general view is that you’ll never make money from real estate investment unless you’re involved in the industry, and even then, you might not. But, if you’re looking for ways to make extra cash, purchasing a property that you believe will appreciate in value is a solid option. What’s important to note here is that you don’t need to be physically involved in the property’s renovation to make money from it. For instance, if you purchase a hotel in need of a major facelift, you can offer your services as a general fixer-upper for those who want to rent it out. Make sure that you have the skills necessary to carry out the required renovations – otherwise, you’ll simply be wasting your time. You might also want to purchase a DIY (do it yourself) property to save money – if you’re not comfortable carrying out renovations, you can use the profits to finance the purchase of necessary equipment.
Tenant Improvement
If you’re looking for ways to make money, most people advise against investing in real estate. The general view is that you’ll never make money from real estate investment unless you’re involved in the industry, and even then, you might not. But, if you’re looking for ways to make extra cash, purchasing a property that you believe will appreciate in value is a solid option. What’s important to note here is that you don’t need to be physically involved in the property’s renovation to make money from it. You can make improvements to the property that the current tenant isn’t happy with and offer them an improved version. In this regard, you’ll be acting as an intermediary between the property’s owner and tenant.