5 Reasons why you should invest in Real Estate
Amidst the pandemic, almost all businesses have been affected, causing the economy to drop and resulting in increase in unemployment and closed businesses. But, this is not the case for Real Estate. As a matter of fact, despite the economic decline happening across the country, the value of land in Metro Manila, specifically Makati, Pasig, Taguig, Quezon City, Alabang, and Mandaluyong, continued to clamber up during the pandemic. Additionally, the demand for office rental spaces and residential lots outside Metro Manila and Central business districts (CBD’s) have risen since the start of the pandemic-- as many people are now working from home and want to be away from the influx of people in Metro Manila.
Included among the top choices of people to buy outside Manila are areas in Cavite and Laguna-- Ponticelli in Bacoor Daang Hari and Valenza in Sta. Rosa Laguna because of their accessibility and proximity from Metro Manila. On the other hand, the demand for office space rental increases especially from the Business Process Outsourcing sector that continues to operate in a skeletal system. This is because many people around the world are still in need of the services that BPO companies provide even during the pandemic.
However, despite an overwhelming growth in the real-estate industry during the pandemic, many people still think that real estate investment is only for the rich and affluent people. People think that real estate investment is not a good choice to put in our money and tend to buy value-depreciating products such as cars and gadgets.They end up selling these things to a lower value when emergencies suddenly happen or when they simply don’t need them anymore. This is where the essence of investing comes out--we should plan and invest for our future and take care of every cent that we earn. Like what most of our parents told us, you will only learn the value of every drop, once you carry your own water. We don’t want our hard-earned money to just suddenly disappear, instead, the money we earned through hard work should also work hard for us too. So, to give you some idea about investing, here are the top five main reasons to invest in Real Estate.
Value Appreciation
Land is an essential commodity for people especially for shelter and agriculture (food) that it provides for every living being. Land is also a scarce commodity as it is a nonrenewable and a limited type of resource. While land resources become more limited over time, the demand for land also grows as our population increases, making land and properties more desirable assets that tend to appreciate in value over time.
Stable and Low Risk
Unlike stocks, crypto-currency, and any other type of investment that are mostly volatile and tend to fluctuate almost every day, Investing in real estate is one of the safest investments because it does not wildly fluctuate on a daily basis. It is a stable investment that can provide you a stable income. Whether in property flipping, rentals, and buying shares from REITs or real estate investment trusts from different companies, investing in real estate will help you grow your money with much lower risk.
Protects your Money from Depreciation
Money is one of the most important and powerful mediums of exchange in the world. It enables you to have a freedom of choice and it provides a better option for a better way of living. On the other hand, the value of money may depreciate over time. There are different economic factors that affect the value of money over time. One of the main reasons is the impact of inflation in an economy. Inflation affects the value of goods and services that can be bought for a certain value of money over time. As the price of goods and services increases, the number of goods and services that can be bought for a certain amount of money decreases. On the contrary, investing in real estate protects your money from depreciation. Real estate doesn't often lose market value. Unlike other depreciable assets, such as cars, gadgets, and appliances that depreciate over time, property value can appreciate over time making your money secured from losing value.
Diversify your Investments
For many investors, diversifying your investment is an extremely important part of securing your money and investment. “Don’t put all your eggs in one basket,” says many investors' tagline when they are talking about investment diversification. Putting your eggs in different baskets will surely help your investment portfolio become more stable. Investing your money in different assets including real estate will lower the volatility of your investment and reduce the risk of losing all your money compared to a one-time, big-time type of investment. Also, diversifying your investment to real estate is better especially for beginners that are trying to diversify their investment for the first time, because real estate offers lower risk and appreciates over time even without doing anything. People can now invest without the stress that their hard earned money can be lost anytime.
Passive income
Passive income is a type of income that allows investors to generate revenue or income without or with minimal involvement or labor to maintain the business. Real estate is also one of the best sources of passive income as it only requires minimal effort to maintain. You will still earn from the land that you bought just by letting it appreciate over time. Real estate helps you generate passive income in different ways such as real estate trading or flipping, rental income, and capital appreciation. In the Philippines, the most common type of passive real estate income is through property rentals. Many real estate investors in the country are trying to rent out their own properties such as their condominiums and apartments whether through monthly rentals or AirBNB’s. Some of the top spots that are good to invest in for AirBNB’s are located in the most famous tourist spots in the country. One of the famous tourist destinations that can be an Airbnb spot during holiday is the Alpine Villas at Crosswinds Tagaytay as it offers the cold Tagaytay weather during holiday season. The condos for sale are accessible to a lot of tourist destination spots near the area such as the Picnic Grove, Sky Ranch and many more. Alpine Villas in Tagaytay also offers a hassle-free renting process, where a condotel operator may manage unit rentals with the monthly income automatically credited to the owner’s bank account. If you want to know more about property investing and or you are interested in buying condominiums and lots, contact our trusted Marketing Associates to assist you.
References: Palmer, B. (2021, March 25). Key Reasons to Invest in Real Estate [web log]. Retrieved September 17, 2021, from https://www.investopedia.com/articles/mortgages-real-estate/11/key-reasons-invest-real-estate.asp.
Yahoo! (n.d.). 8 major reasons why you should invest in real estate starting today. Yahoo! Finance. Retrieved September 17, 2021, from https://finance.yahoo.com/news/8-major-reasons-why-invest-175703808.html.
Philippine real estate opportunities in a post-pandemic world: Why intelligent investors should act now (2021, March 23). INQUIRER.NET. MANILA CITY. from: https://business.inquirer.net/319896/philippine-real-estate-opportunities-in-a-post-pandemic-world-why-intelligent-investors-should-act-now