Setting aside a part of your income and investing them in Real Estate can be a very rewarding venture which would bring immense returns if done right.
Before taking a plunge into real estate you must first have a thorough understanding of all that it implicates. Real estate is generally considered a long term type of investment because of the period of time it takes to appreciate and generate returns on investments.
Another characteristic is its low liquidity compared to other investment tools. It is considered the least liquid of all assets. In lay man’s language, Real estate takes a lot of time to convert to cash. In cases where the investor should urgently have need of cash and would love to liquidate, unless there’s a ready demand for that property, achieving this can be a herculian task.
As great as property investments are, it’s rather sad to have to liquidate prematurely worse still to liquidate at a price lower than its market value simply because of the need to access funds.
For this reason, a good way of protecting your real estate investment is to have an Emergency fund.
An Emergency fund is a very liquid fund (cash fund) set aside to cater for emergencies should they arise so you do not need to liquidate your investment therby forfeiting your returns on those investments. An Emergency fund must be easily accessible always.
Having a diversified investment portfolio can be a life saver. Investing in other more liquid tools like shares, mutual funds, bonds etc can help against liquidating your real estate assets and in cases where you don’t necessarily need a very large sum, you can simply liquidate a part of your shares or bonds instead of your entire real estate asset.
Looking for Real Estate investment options check out 5 Awesome Properties in the Lekki Axis .
Don’t forget to subscribe to our mailing list for tips on real estate investment.