Every investment endeavor comes with its own risks and it’s important to weigh all possible setbacks. Most especially in these times where seemingly well-respected figures working their way around the financial industry can sound more than convincing and even intimidating. While they embody traits the likes of Bernie Madoff once had, the power of digital manipulation for fake online presence leads to disinformation.
The current venture landscape has since opened many more doors for other options to build assets. Transactions are now easy and fast-paced, needing little to no documentation nor requirements to move money around, while promising hefty returns on a monthly basis. These offers are tempting and eagerly convenient. It is, however, a double-edged sword. The lack of transparency can go both ways between investor and manager. Dangers can come in the form of unclear descriptions in investment plans and strategies, as well as either blurred or over-embellished credentials and track records of personalities within certain newly sprung investment firms. Proper due diligence and research can be more difficult to conduct on a new establishment that relies on risk-takers, possibly naive ones, to take a chance.
While investing in real estate still does require proper research and background checks, it remains to be the most tangible venture, as well as the most flexible one in terms of strategizing returns for a number of reasons.
Appreciation. The right property guarantees an increase in its value over time. Having a good eye for a developing area or community is an opportunity to “buy-low/sell-high” and enjoy a good profit, perhaps even double, of the initial property value.
Steady Rental Income. A property can be leased out simultaneously, while it sits and waits for its value to increase. As the property’s worth increases, rental rates should also increase.
Leverage and Diversification. A property can be used as leverage to make other property or non-property investments. Collateralizing owned land allows one to build more wealth. This will grant better financial access such as bank loans, while yielding more favorable interest rates and terms.
Succession. Real estate is a physical asset that can be passed down through generations. An income-generating property provides long-term income and is a stable source to maintain wealth within the family. There is also the potential for real-estate values to rise over longer periods of time. The valuation is more stable compared to other more volatile assets such as stocks.
Diversifying one’s savings in order to gain adequate profits and build assets has always been the name of the game when it comes to building wealth. Though stocks and bonds are viable options, they can come with a multitude of intangible risks beyond control. The biggest risk of all, would be entrusting one’s hard-earned cash to questionable personalities.
Potential investors should always keep in mind that it takes decades worth of public trust to be considered worthy to handle one’s hard-earned money.
Fortunately, the country’s real estate industry is abundant in credible and reputable developers, agents and brokers that have long established themselves, which is the reason why real estate is still considered the top investment choice.
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