Did you know that real estate is one of the most stable and reliable long-term investment vehicles, where investors can enjoy predictable cash flow, excellent returns, and diversification with well-chosen assets? And with Nigeria being the most populated country in Africa, it also positions itself as a huge market for untapped investment opportunities within the real estate space.
Are you considering investing in real estate? In today’s blog post we shared insights on what you need to know about real estate benefits and why it’s a good investment:
1. Portfolio Diversification
One benefit of investing in real estate is its diversification potential. Real estate has a low and, in some cases, negative correlation with other major asset classes. This means the addition of real estate to a portfolio of diversified assets can lower portfolio volatility and provide a higher return per unit of risk.
2. A source for passive income:
Real estate investment in Nigeria has served as a source to generate passive income. You can put out a house or land for rent.
3. Improved Return on Investment (ROI):
Real estate investors make money through rental income, any profits generated by property-dependent business activity, and appreciation. Real estate values tend to increase over time, and with a good investment, you can turn a profit when it’s time to sell. Rents also tend to rise over time, which can lead to higher cash flow.
4. Real Estate can be Enhanced:
Real estate or property can be improved in order to increase its market value. In what sense? You can make a few improvements to a property to increase its value. An example: A 2-storey building with a good foundation can be improved to 3-4 storeys. You would need to have the necessary governmental approvals before you proceed.
Real estate is a distinct asset class that’s simple to understand and can enhance the risk-and-return profile of an investor’s portfolio. On its own, it offers cash flow, tax breaks, equity building, competitive risk-adjusted returns, and a hedge against inflation. Real estate can also enhance a portfolio by lowering volatility through diversification, whether you invest in physical properties.
For more information, send us an email at [email protected] and we would be delighted to walk you through your journey to wealth creation.