With all the fuss that has happened in 2020, people are actively looking for safe and fruitful investment options to put in their money. There are multiple channels for investment, and among the most popular ones is real estate. Simply put, a real estate investment deals with the ownership and management of real estate for a profit, which comes in forms such as property appreciation, rental/lease, and flipping. The key to a successful real estate investment is to determine, invest, and capitalize on current opportunities such as discounts, promos, and market information to make the most gains out of your investment.
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Why Invest in Real Estate in 2021
For those looking into it, it’s important to realize that investing in real estate means serious business. Its high initial capital and low liquidity make it a challenge to manage as compared to other investment types such as investment funds, stocks, and small scale home businesses. Indeed, real estate investment prevails to be one of the safest and most rewarding options out there. Despite the recent COVID-19 pandemic, most people will continue, if not be more enticed, to buy more properties. According to a report, this is because, currently, most properties are sold at a low price as some sellers rush to liquidate their properties and consumer demands weaken. And now would be a great time to take advantage of the market condition and more affordable houses and lots before prices make a comeback and skyrocket to the moon. Here, we enumerate three reasons why you should consider investing in real estate in 2021:
Home as a Sanctuary
In 2020, the pandemic shocked the entire world and significantly changed the way most of us live our lives. All of a sudden, we couldn’t go to the office, attend parties, shop at malls – and are forced to be cloistered within our homes. We look back at how we notice small details in every room and realize aspects that we wish we had in our homes.
With this mindset that anticipates a possible recurrence of a similar crisis, people are drawn to the idea that homes should have an atmosphere that’s conducive for work, leisure, and long-term confinement –storage rooms must have corners for long shelf life foods and disinfectants to load on emergency and health supplies; home spaces that ideally could accommodate a few pieces of workout equipment to keep yourself active during quarantine; and most importantly, work-conducive spaces must be dedicated so that you can peacefully have your zoom meeting or finish up on those paper works – and no, typing in bed while Netflix is playing does not beget productivity.
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Generate Cashflow
If 2021 does become a year of recuperation and growth, real estate can provide an opportunity to earn decent cashflow through rental income. Paying down your mortgages while simultaneously earning a rental income helps you build wealth and equity. For most financing solutions, 20% down payment gets you the entire property. The great thing about this is that by paying upfront just a fifth of what the property is worth, you can already lease the property at full price.
Fortunately, in today’s world, connecting tenants and renters is made even easier through the digital space. In addition to traditional real estate agents and brokers, virtual platforms such as Airbnb, or social media accounts provide a great option for tenants and renters to meet and reach their clients and service expectations, respectively.
Value Appreciation
Even if 2021 takes a second jab at us with whatever surprises it has in store, real estate remains bullish in the greater timeframe according to a recent article. Moreover, Lobien Realty Group (LRG) and JLL Philippines predicts the huge growth potential in next year’s market associated with real estate and e-commerce. It is important for people to realize that population continues to grow exponentially amidst the declining land resources; thus, the inevitability of property appreciation. The concept of land appreciation hinges on time and the development of its location and environment. The value of the property, and all aspects associated with it, such as rent increases and inflation; hence, it’s reasonable to increase sales price or rent cost every year.
It is tempting to refer to the good old saying, “location, location, location.” While indeed picking a hot location returns a higher cash flow, it trades-off with a more expensive property acquisition due to a high appreciated valuation. Because of the recent crisis, businesses realize that it is possible for some employees to perform their jobs in the comfort of their own home. The work-from-home set up allows companies to save on office resources and reduce the stress workers experience by physically attending busy office environments. Moreover, this opens and drives the market to more affordable homes farther from the inner city.
How Do I Invest in Real Estate
Investing in real estate isn’t something done overnight. There are tons to consider before putting down the dough. Obviously, you would want the best out of your money and instinctively desire a comprehensive and competitive investment package. Real estate investors keep a sharp eye on four aspects when deciding on a potential property: 1) Affordability is the first aspect to narrow down your investment options. Lifestyle budget should be carefully considered so that you can comfortably pay your mortgage and enjoy life’s simple pleasures. Lessandra develops a country-wide community of affordable house and lots with the main goal of elevating Filipinos lives at home; 2) Ask yourself if you’re planning to buy a house for retirement, for starting a family, or for simply working in solitude. Accessibility to institutions, facilities, and major transport are huge factors to consider to conveniently join home and outdoor businesses; 3) Security isn’t only how well you keep windows and doors locked, but it’s also how neighbors, homeowners, and community security resources and manpower collaborate to provide a safe living environment; and finally 4) Community features put the cherry on top. Community amenities such as a swimming pool, sports center, playground, and Sunday groups are just some of the gimmicks communities provide its homeowners to make the simple joy of living much more enjoyable.
If you’re ever on the market for Philippine real estate and want nothing less than the complete deal, take a tour at Lessandra and see the quality and affordable house and lot for sale. You can even have a sample computation of a home package through the loan calculator.
While vaccines for the pandemic continue to be developed and distributed, consumers and the general market begin to regain confidence in the economy. With this, the year 2021 could be the best chance to have a great position in real estate and get your own affordable home.
