Real estate can be a good investment for maintaining or even building wealth. One must keep in mind some key ideas in order to make the best choice when deciding where and how to invest. Here are some of the most important things to keep in mind while planning your investment:
Emerging economies show promise
There are some areas in the world where economic growth is occurring at a rapid rate. These countries have a lot of catching up to do in order to be major players in the international economy. Catching up means phenomenal growth and great returns for those who invest early, before real estate prices start to rise dramatically.
Real estate is always worth something
Stocks and bonds can fall to zero. Real estate is land and buildings, and land always has value regardless of the value of any structure on it. There is only so much land available – in urban environments such as Abu Dhabi, land is becoming scarce. As a city grows outward, the land that is further away experiences increases in value.
Ways to invest
Investing in foreign real estate is not as complicated as you might think. A holding company such as M1 Group can invest your funds in a variety of real estate and related sectors. Commercial real estate in many Middle Eastern cities is in demand due to the increase in the fashion and other retail sectors. More manufacturing facilities are needed to meet the larger demand in consumer goods. When embarking on a new course of investment it is always a good idea to consult with a professional such as Azmi Mikati of M1 Group. M1 experts can talk to you and determine the amount of risk you are comfortable with, and match your investments to your long-term financial goals and needs.
Real estate in the US
While there are some opportunities in the US market, they are far more limited than those in emerging economies. The US has already experienced a lot of their growth, so if you want to invest there, you need to look for areas where larger towns are expanding outward. In cities such as Asheville, North Carolina, real estate within the city itself is far too expensive for many young families to afford, so they are looking for homes within an hour’s drive. Of course, there is some risk with anticipating growth and it is hard to say what type of return you can expect.
If you are near or already at retirement age then you may be looking for a more immediate return on your investment, with little risk. Younger investors can sometimes afford to take on more risk because they have a lot of time to make up for any losses. Regardless of this, you can decrease your level of risk by investing in many different sectors of real estate. This might mean purchasing a property in each of several cities or using a holding company to automatically invest your funds in many areas, without you being a total owner or landlord.