Introduction
The lack of basic education about personal finance and investing is one of the most evident flaws in our school system. Saving is a very good skill, but over time, a currency's spending power reduces as a result of inflation. So you have to know how to invest. Investing is the act of putting money or resources into something in order to gain money or make a profit. Stocks, bonds, mutual funds, and real estate are among the several types of investment vehicles available, each with its own set of risks and rewards. Let us pay attention to real estate investing.
Real Estate Investing May 5
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To get started, there are 4 main types of real estate properties. These are 1.) Residential — refers to all kinds of homes. 2.) Commercial — malls, shopping centers, business offices, etc. 3.) Industrial — warehouses, buildings or pieces of land where products are manufactured. 4.) Vacant or raw land.
Describe your house. Would you prefer to rent or buy your own property?
Property rental is one of the most effective methods to make money. However, being a landlord can be a tough job as you'll be responsible for paying the mortgage, property taxes, and insurance. Maintenance, dealing with tenants, and unexpected issues can be a challenge too.
What type of properties do you own? How do you leverage it?
Airbnb is an app/site that serves as an online marketplace for accommodation. Hosts can list or rent properties for short-term use. It could be a whole house, a spare room, or even a couch. This could be a good way to generate passive income.
Have you used Airbnb? If you had a property to rent, would you consider advertising it on Airbnb? Why? Why not?
Property appreciation is another strategy. Development of a location is a factor. Maybe a mall and some establishments were to be built nearby. Now the location is busier and congested. Or maybe you renovated the property. Our land is a scarce resource, the land on earth isn’t going to multiply, so its supply is fixed.
Are property values going up or down in your country? What causes these changes?
Real estate investment trusts (REITs) allow you to invest in real estate without owning physical property. Just like mutual funds, they're firms that use investor’s money to buy, run, and sell income-generating properties. Usually office buildings, retail spaces, apartments, and hotels. REITs are traded like stocks, which makes them highly liquid, unlike physical real estate investments. They also pay high dividends which makes it a popular investment in retirement.
Would you like to invest in real estate? Which do you think offers the best investment, commercial property or residential property?
Although illiquidity is one of its drawbacks, real estate is one of the safest investments available. It generates higher returns while not being volatile as the stock market. It is one of the easiest wealth to pass to your children since it is a tangible asset over which you have complete control.
How many properties would you like to own in the future? What are your thoughts about bank financing?