How to Invest in Real Estate is one type of investment that promises big returns. It can be seen from the property prices that always increase every year.
For those of you who have idle funds, immediately invest in property early on. The more you delay, the more expensive property prices will be. Finally, it is increasingly difficult to catch up with the increase and make you lose Real Estate investment opportunities.
5 Simple Ways To Invest in Real Estate
Investment Property Definition
Property investment is the purchase of property or real estate with the aim of making a profit through leasing, resale of property in the future, or both. So, it is not purchased as a place of residence of the buyer.
Property investment can be owned by individuals or institutions or business entities. Property investment can include long-term or short-term investments.
Property investment is often called a second home. The first house to live in, the second house as an investment.
But not all use that way. It is also possible for someone to buy a second home, for example, a villa in a tourist destination as a place to stay if they are on vacation in the area.
In other words, it is not a property investment. But for personal gain. Property is not used as a source of income.
Property Investment Benefits
Here are the advantages of property investment that will make you smitten:
As passive income
Property investment is the right way to create passive income. Income earned just by sitting comfortably or while lying at home.
Money enters the account in the form of rental income, dividends, interest, and even royalties from property investment results. Isn’t it delicious? It is suitable for preparation for retirement or in old age.
Prices tend to go up, big money
Property investment is known as a low-risk investment. That’s because the property market is not as volatile as the stock market.
The proof is the increase in property prices an average of 10-20% per year. Even if it goes down, the reversal is fast, so you can make big profits.
Not eroded by inflation
Looking at property prices which tend to continue to rise by a percentage of 10-20% every year, this means that it is far beyond the inflation rate. Inflation in Indonesia averages 3-5% per year.
You determine the price
You are an investor or property owner. What price or rate do you want when selling or renting a property. Control is in your hands.
No need to monitor every day
Stock and mutual fund investments need to be monitored at all times. But not with property investment. You just buy a property, then rent or sell it. You can earn right away.
No need to be monitored every day, because your assets will not be lost. In addition, the tenant will take care of your assets. If you want to control it, you can do it once in a while.
Can be used as collateral
The property you buy can be used as collateral or collateral when you need a bank loan. Maybe you need additional capital to increase your investment or during an emergency.
Property Investment Losses
Investments in property also have disadvantages or drawbacks, including:
Need big capital
Conventional or offline property investment is a capital-intensive investment. This means that this investment requires a large amount of capital. Property prices start from hundreds of millions to billions, even trillions of rupiah. Can you?
Prone to disaster so need protection
Property investment is quite vulnerable in the event of a disaster, such as the risk of flooding, fire, earthquake, and other risks. You must cover this risk with property insurance.
That means you need to spend more to pay the premium every month to get property insurance benefits.
Hard to sell fast
Property investment is a type of investment that is illiquid or cannot be withdrawn at any time. It took quite a while to sell or pawn it. Unlike stocks or mutual funds.
Not to mention if the location of property ownership is not strategic, it is very difficult to sell it again or there are no interested people. It may take months or even years.
Example of Property Investment
Property investment is actually divided into several types. There are residential, commercial, and mixed properties (commercial and residential or residential).
The following is an example of property investment by type:
- Condotel or condo-hotel
How to Invest Property
Property investment needs to be done properly and correctly so that it can run smoothly, and get maximum results. Here are three ways to invest in property that you can try:
Online property investment
Property investment has now penetrated online. This means that investors do not only have to buy a property with a wad of money.
Online property investment can be done in the following ways:
- Property equity crowdfunding
Property equity crowdfunding is a joint property investment with other investors in platforms or applications that provide these services. This is a cheap online property investment because it doesn’t need big capital like buying offline property.
- P2P Lending property investment
Another way to invest in property for beginners is to fund or invest in P2P Lending, especially for investment projects. This platform connects developers with the community.
- Buying property issuer shares
The next way to invest in property online is to buy shares of property issuers. Stock investment in the property sector can now be done online through an online stock trading application.
Rental system property investment
Property investment by leasing assets is the most popular way to increase income. You can buy properties, such as houses, apartments, condominiums, townhouses, then rent them out for the residence.
Or buy office properties, shop houses, retail stores and rent them out for business or commercial purposes. From the results of the rental, you get a monthly or yearly rent.
Flipping property investment
Flipping property investment is buying property at a lower price than the market. Further renovations were carried out and then sold at a much more expensive price.
This kind of property investment model can be called a short-term investment. Because, the process is fast, buying a house, renovating, and selling to make a profit in a short time. Truly a profitable property investment.
Understand to Profit Property Investment
Property investment is not impossible for those of you who have a mediocre salary. Anyone can have the opportunity to invest in property without capital or small capital.
The key is learning. Learn to understand the ins and outs of property investment and the right buying and selling strategy, so you don’t make mistakes that make you lose.