How can you really make a real estate investment? There are multiple answers. Indeed, there are many ways to make a real estate investment and that is depending on your budgets. Here is an overview of 24 different ways to invest money in the real estate industry. It’s up to you to choose the one that suits you the most and meets your goals and your means.
How do you make a real estate investment according to your budget and your objectives?
Here is an overview of the different possibilities you have for investing in property in Nigeria or in other countries. There is something for all tastes and for all budgets. Each type of investment has its advantages and disadvantages. It’s up to you to choose the one or those that are best suited to your situation and your needs. To put all the chances on your side to make a profitable and successful investment, it will be necessary to find out about the specifics of the type of investment you have chosen.
1. Buy your main residence
It’s the first thing you think of. Buy the accommodation in which you live. This can be a good solution for many households. However, it is not a good choice for everyone. You have to stay a certain number of years (depending on the purchase prices and rents of equivalent accommodation in your area and their evolution in the years to come) for it to be profitable. This does not therefore correspond to everyone’s situation, especially in a world where removals for professional or family reasons are more and more frequent.
2. Purchase of old accommodation
The 2nd most common real estate investment solution is the purchase of old housing to rent it out. You then receive rents which make this purchase profitable. It is also possible to realize a capital gain when you sell this home in a few years if the evolution of property prices has been favorable to you during this period.
Today, with real estate prices which remain high, it is difficult to hope for a certain gain. The objective must above all obtain a good rental return on your investment. Profitability on real estate is quite limited in all sectors because of the high prices compared to rents. So this is not necessarily where you will find the best returns for your money, especially compared to investments that are safer and require much less effort such as good life insurance.
3. Invest in a car park or garage
Not enough money to invest for a larger studio or apartment? Do not want to bother with the various hassles of the landlord? Then it is preferable to make a real estate investment in parking spaces, especially in places that lack them. This type of property requires little or no maintenance and is very easy to rent. You can buy it at a very affordable price. In some cities, profitability is quite high on parking lots. This can be ideal for starting slowly for a first rental investment and building up real estate assets.
4. Make an investment in life annuity
The life annuity is a very specific real estate transaction system. You buy a property by paying only a cash payment (part of the price of the home) and then paying an annuity every month until the sellers die and this property comes back to you entirely. For the seller, this allows him to be sure of being able to continue living in his home while receiving a monthly income and part of the sale upon signing.
For the buyer, this makes it possible to make a real estate investment, which is long-term, without knowing when this apartment or house will be available. The good deal can only be done in the event of premature death of the seller in relation to a life expectancy. In other words, we must be aware of the specificities of this type of real estate sale.
5. Buy only the bare ownership of real estate
For real estate, there are two categories of people:
– The usufructuary: this is the person who disposes of this accommodation at his convenience (to find accommodation or to rent it and derive property income from it).
– The bare owner: this is the person who owns this property. He alone can sell it, give it away or destroy it.
Usually, when a person or a household buys a house or an apartment, they are therefore both bare owners and usufructuary. However, it is also possible to buy only the bare ownership of a property and leave the usufruct to another person or another household. This makes it possible to obtain housing at a lower cost.
We often find this during donations. For example, parents decide to give bare ownership to their son or daughter and to keep the usufruct of the home in which they live and which they had previously owned.
6. Housing overseas
Investors who invest their money in housing located overseas benefit from a greater tax advantage. In return for its more substantial tax advantages, there is the geographical distance which does not allow you to go there (or very infrequently). It is therefore necessary to verify the information you receive before committing to a financial investment of this type without ever seeing anything of the place or the accommodation in question.
7. Invest in a piece of forest or a vineyard
Some investors have specialized in very specific real estate sectors. This is for example the case of an investment in forest plots or even in a vineyard. The use that can be made of this type of land and of what grows on it will be studied on a case-by-case basis.
8. Agricultural land
Whether for your personal use, to rent this space to farmers or even to keep them fallow, it is also possible to acquire agricultural land. These lands are much cheaper in price per square meter than building land.
For agricultural land that is close to towns or villages, it is possible that in the future, it will become constructible and then see its value explode. However, there is no guarantee that this will be in the future, even in the long term.
With this overview, you have more ideas on how you can make a real estate investment. So what are you waiting for? Contact us now at SDG Realties and let’s help you through your real estate investments.