3 reasons to invest in real estate
In times where a classic savings account does not bring you any return anymore, where stocks’ and shares’ values jump at the whim of emotions and rumours instead of rational arguments, what could be an alternative for securing your savings. An alternative by excellence is real estate. But why?
1. Powerful and stable
Neither stocks and shares nor a savings account have both qualities.
Stocks and shares, if all goes well, may have the power to act as a hedge against inflation, but they dearly lack stability.
A classic savings account may have all the stability you want, but fails to keep up with inflation. This actually means that, over time, you lose buying power when you leave your savings in a savings account.
Real estate on the other hand is a pretty stable asset that does have the ability to keep the investor ahead of inflation and to help him grow his patrimony.
2. The possibility to add value
There are many ways to add value to your real estate property, making it worth more and thus increasing your patrimony.
A major pitfall to avoid here is over-investing in refurbishment, resulting in a total value that puts your property above (and out of) the market.
It’s certainly recommendable consulting an expert like your real estate agent before embarking on this adventure.
3. An imperfect market
Although it sounds negative, it is an advantage for the real estate investor.
In a perfect market all assets go at the same price and all players have the same knowledge of the market. E.g. shares of a company on the stock exchange.
The real estate market is an imperfect market: properties go at different prices and players in this market have different contacts, different negotiation skills and a different knowledge about the market. The last element would be considered as insider trading and illegal in the stock market, but not in real estate.
A good real estate investor can thus buy below market value and sell above.
Apart from this, even when bought at market value, real estate will stay as good as sure ahead of inflation.
Naturally there are many other good reasons to invest in real estate. Come and talk to us. At Z-Yachting & Golf-Estates we will be happy to help you find the right tailor made solution for your personal situation.