Real Estate a Tangible Asset, a Hedge against Inflation Real Estate Investment property is a real asset, like precious metals and oil. It is tangible and physical, deriving its value from properties and substance, unlike the case of financial assets, whose value is backed by underlying real or intangible assets. This means that a real estate investment can offer you an invaluable hedge against inflation, so it should be reassuring to you to know that real estate has its place in your diversified portfolio. However, you should also be aware that real estate, like other real assets, has its drawbacks: its transactions, carrying and property management costs are higher; its liquidity is lower. Below are some of the ways that you can profit from real estate investments. Some Options Investing in real estate – whether residential (e.g. houses, apartments) – commercial (e.g. office, shopping space) – or industrial (e.g. manufacturing facilities) – has a number of obvious benefits. Considerable gains can be obtained from the future resale or rental (or both) of an investment property. How fast you want to turn a profit is important in determining your investment scenario. If you are thinking in the long-term, an apartment building might be the right vehicle. You can profit from capital gains via the appreciation of your investment property over time, as well as possible increasing rental income. If you have an eye on a quick profit, however, you might consider the common practice of flipping the property – buying it and selling it after fixing it up. In any event, whether or not you are contemplating the eventual resale of your investment property, you can just sit back and enjoy the receipt of rental income from the apartment, house, or office/shopping space you own. Skilled Property Management Essential to Profitability Finally, bear in mind that whether you decide to invest in a residential, commercial, or industrial property, solid, conscientious property management is critical if you want to both maintain the value of the property over the long-term while continuing to generate on-going rental income. Make it a priority to hire an experienced, real estate-savvy person or team, well prepared to handle all the duties...

Apr 29, 2013

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