Be an Investor Not an Accumulator

Wednesday, August 12, 2020

Be an Investor Not an Accumulator

There are many Business houses/big families who have over the years been buying properties for the use of the family / business.  Over the years while the family/business requirements have changed and some of the investments have almost become redundant except for the capital value of the properties. The use of the property is now left, only for hedging purpose. This is called accumulation of real estate assets.

Real Estate is one of the most profitable businesses. Each year, property prices increase noticeably. Most people wish to be in this business, some don’t because they lack capital. The payback of investing in real estate includes:

  1. Passive- Yearly Price Increase
  2. Active Returns With Stable Cash Flow
  3. Tax Advantages
  4. Leverage

It is advisable to treat real estate as an investment and buying and selling as a trading business. From time to time the real estate portfolio should be examined; the following principles should be applied to them:

  1. Would we require this size of property for our business in the future?
  2. Would we require this property for our personal use in the future?
  3. Is it providing us with any returns other than appreciation ?

If the answer to the above 3 is “NO” it is time to change the investment, every few years the business and personal demands change, it is a time for restructuring the property portfolio.

The Covid Crisis is making people reflect on their choices in all walks of life. This is the perfect time to take a look back and check if you are an accumulator? And to become an investor. There is a huge money-making potential in real estate for an investor, especially in the present time. A proper strategy needs to be devised for investing in real estate that considers your overall goals.

The timeframe for restructuring any property portfolio would depend on the size of the portfolio. An ideal real estate portfolio should be able to generate monthly rental returns. Streamlining your properties could be considered the safest strategy because it will keep capital at zero risk. Steady and decent capital appreciation of real estate property is common. But the part which makes property investment so dear is its capability of generating stable long term income through regular monthly returns, by way of rentals.

Need an expert advice?

We at Roshan Real Estate meticulously evaluate your current portfolio, provide an extensive review of the markets, help you develop investment objectives, discuss your risk capacity and tolerance, and design your strategic asset allocation. In short, we help you appropriately manage your assets to achieve your personal financial goals. For the beginners looking to break into the industry, we can discuss with you our experiences with real estate, the market place, and whether it may be appropriate for your situation. For the seasoned veteran we can help you evaluate your options when it comes to parting with your properties. A 32 year exposure of the Nagpur Market gives us the experience and knowledge that enables us to guide you to restructure your existing property portfolio.

Our simple suggestions will show you how to get rid of unnecessary risk, minimize taxes and expenses, and generate any currently needed income. Whether you are looking for long-term growth in the form of appreciation, current income or a blend of the two, we have perfect suggestions and solutions!

 

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