So you’ve decided to get serious about investing. Excellent! Not only will it provide you with more money to save, but it can also help you feel more secure in your future. However, investing is not as simple as putting your cash into a mutual fund and then forgetting about it for years on end. There are many ways to invest in real estate and other assets, so choosing the right one may require some research on your part. If you’re looking for a guide on how to start investing in real estate then this article is here to help!
Why Should You Invest?
The biggest reason to invest is that it’s a great way to grow your money. When you put your money into investments, you can earn more on top of what the market pays out in dividends and interest. If you put N10,000,000 into an investment today, and that same amount grows at 25% every year for ten years (and there are no taxes or fees), then by the end of ten years, you will have approximately N118m+. We didn’t even take inflation into consideration. Fortunately, real estate even on a small scale in the right location like Ibeju Lekki, Lagos has even potential at the moment to earn over 200% ROI in a year. Do the maths. This is not an exaggeration, it’s a fact.
It can be daunting, but investing in real estate is worth the effort! It’s important to start with a simple investment strategy and learn more about investing through books, blogs, and forums. You should also attend seminars and meetups to help you make your first few investments. Once you get the hang of it, find other investors who share your interests or goals and work together to achieve them!
What Are The Main Forms Of Real Estate Investment?
There are a number of ways to invest in real estate, including:
- Rental Properties
- Flipping properties
- Long-term hold (buy and hold)
- Foreclosure investing (buying distressed properties for bargain prices)
Beyond these four main categories, there are other forms of real estate investing that are worth exploring. Here’s a brief overview of each one:
Commercial real estate: This is the buying, owning, and leasing of commercial property for profit. Commercial properties include apartment buildings and complexes, strip malls, office spaces, and more. Foreclosure investing: As a wealthy investor looking for a way to make money with real estate without being an owner-occupant (like renting out an apartment), foreclosure investing may be a good fit for you. This strategy involves buying distressed properties from owners who can no longer afford to pay their mortgages or pay off
A real estate investment trust (REIT) is a company that owns, operates, or finances commercial properties. Unlike mutual funds, which allow you to invest in multiple people’s portfolios at once, REITs let investors invest directly in real estate companies.
Real estate syndication:
A real estate syndication is when a group of wealthy investors pools their money together to buy properties. The properties are managed by the same firm and then sold for profit.
Real estate crowdfunding:
Real estate crowdfunding is a relatively new way for investors to buy into properties. The investor pays an online platform, like Fundrise or LendingHome, which then uses the money to purchase a property and manage it.
This is a great option for those who want to be hands-off or don’t have time to manage the property themselves. Real estate crowdfunding also allows investors in different locations to invest in properties they wouldn’t otherwise be able to afford on their own. Some of these platforms even allow investments as low as N1,000,000.
How To Begin Investing?
Investing is an important part of growing your wealth, so it’s important that you are able to do it successfully. If you’re starting from scratch, there are a few things you should know about how investing works. Here are some tips for beginners.
Begin investing as soon as possible
To get started investing, you could consider using a Robo-advisor. Robo-advisors are online platforms that use algorithms to create and manage your investment portfolio for you. While they don’t offer the same personalized advice as an actual financial advisor, they do provide high-quality portfolios based on your investment goals and risk tolerance.
Robo-advisors also make it easy to get started with as little as N500,000 in your account! If you find that investing through a Robo-advisor doesn’t fit your needs, there are other ways to invest in real estate, and that’s by reaching out to a reputable real estate company like Elitewise Homes Limited. We offer a free consultation to help understand your financial needs as well as proffer solutions with great investment options.
Decide how much you want to invest
The first thing you need to decide is how much of your money you can afford to invest. This is a personal decision, but here are some factors that may help guide your decision:
- How much can I spend on my lifestyle?
- How much will this investment affect my retirement?
- What would happen if I didn’t invest?
Once you’ve answered these questions, it’s time to set up a budget and figure out how much money should be invested each month. If possible, consider setting aside an amount equal to the total amount of debt in your life (mortgage payments, credit card bills).
Set up an investment account
You now have a good idea of what you want to invest in, and where you might find the best deals. Now it’s time to set up an investment account.
- A real estate investment firm (REI) that can either buy the property for you or manage it as a rental unit for you
- A specialized broker who focuses on your type of investment
- A broker who has a good reputation for providing high-quality service
- Make sure the broker is licensed and registered
Identify your investment options
There are many different types of investments out there, and it’s important to identify which ones will be right for you.
Investment options include stocks, bonds, mutual funds, real estate, and more. Each type of investment comes with a risk level that’s appropriate for your financial situation. For example: If you have N10m to invest and want to earn high returns in the short term (1 year), then investing in stocks might not be the best option since they’re usually considered riskier than other investments like bonds or real estate.
If you’re just starting out in life (late teens/the early 20s) but don’t have much money saved up yet…you might want to disregard this advice because those really low-risk annuities aren’t going anywhere anytime soon!
Choose an investment strategy
Choosing a strategy that suits you is important because it will determine how much risk you are willing to take on. As with any investment, there is always some level of risk involved. The greater the risk, the higher the return potential but this is not true with real estate. Most times we tell people, that real estate is the only investment with high ROI and minimal risk, even no risk at all when you invest through a reputable real estate development company.
Investing in stocks, for example, is generally considered riskier than investing in bonds or real estate because stocks are less stable than other investments and can lose value quickly if market conditions change rapidly (such as during an economic downturn). However, they also have higher potential returns over time because their value can increase significantly due to company performance or changing industry trends—as long as those increases aren’t offset by losses if stocks happen to drop in value as well.
If your goal is to make steady returns over many years instead of trying to build wealth quickly then it would make sense for you not to invest too heavily into stocks since they’re likely going to be more volatile during those times when economic conditions get tough (like during recessions). This means that keeping some money safely invested over long periods might mean missing out on gains from having more aggressive portfolios but at least there won’t be any big losses either!
I am glad you decided to invest in real estate. You have made a great choice and will be able to reap the rewards in the future. Remember, it is important that you make sure that your investment strategy is one that fits your goals!
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