In the last twenty years, there has been a global upsurge in the real estate sector. Buoyed by the returns on investment, the quality of infrastructure that have made properties a well supported enterprise and population increase, the sector has boomed.
Additionally, the diverse variety of offerings that enable anyone to get a stake in real estate, and start generating a consistent, profitable income from it have powered its ascent as a solid, high return investment avenue.
Interestingly, it is one of the few sectors that even does well when the product itself is damaged. Consider hurricanes and natural disasters – as property rates plummet in affected areas, real estate players tend to swoop in to make the most of low costs, after assessing the possibility for future growth in the area.
Here is why you need to invest in this sector
The real estate sector is low on volatility
In simple words, this means that commercial real estate, (i.e. private) tends to deliver a consistent rate of returns over a long period of time. Apart from the obvious benefit gained from the fact that real estate transactions are not conducted that frequently (therefore preventing fluctuations). Additionally, the valuation of real estate is safer than the highly temperamental stock market, where a wrong quote by a CEO, a political calamity or a natural calamity can set off as down swing.
It is an asset you can use
You are investing in land. Short of an actual earthquake or tsunami, that land is not actually going to get damaged, and it does not actually need maintenance (apart from security and the running around for paperwork).
Further, you can actually use real estate yourself, without compromising its value. Inflation will only increase the value of the real estate, year after year.
Inflation is good for business
One of the few sectors that makes good on inflation, the valuations on property will increase year after year, giving you a good bonus on what you bought it for, no matter when you sell off.
Further, you can always use real estate as a source of credit for further business investment. Either as a mortgage/business collateral, or even as the prospective site for new business. You can also branch into office/residential real estate development by fragmenting up your holdings, creating more lines of revenue.
Real estate is always going to be a stable enterprise, as demand will only increase, along with the aforementioned increase in valuation due to appreciation and inflation. Of course, you will need a great valuation service to assess the property you are investing in, or currently hold, and want to sell off. Valuator Australia, a major player in the Australian real estate valuations arena has worked with a portfolio of major clients including Sydney Water and ANZ. The company has experience in providing valuation reports for not only the full spectrum of real estate assessment, but also business and plant and equipment/machinery valuation. Get all the details you need at valuator.com.au/business-valuations.
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