Most entrepreneurs today avoid working on real estate and only focus on their primary business ventures as the industry can be so complicated that it seems unapproachable. But real estate, if approached smartly, can help build wealth and also secure your assets from the volatility of the market, and they could even need proper investments to increase profits. Micro investments in CRE properties could give high returns.
If you are an entrepreneur, then you must consider real estate, and here’s why-
Inflationary Hedge
The millennial entrepreneur population in most cases is looking for ways to live a much-relaxed life. They don’t wish to slog 9 to 5 for day-to-day expenses and as our lives become more complicated and prices of even the necessities hike, it is understandable.
This is also one reason why the hardworking millennial population needs to get familiar with investments.
Real estate investment allows entrepreneurs to make their hard-earned wealth into an inflation-proof asset that can be used in the future to expand your business or even hold large sums as unlike shares and stocks, they don’t go down with the markets. As a property owner, you can very easily raise the value of your property by renovating the property, this is known as forced appreciation and it is a great way of generating wealth.
Great long-term investment
Many of you may be questioning, why invest in real estate? If you invest in real estate assets, you get an opportunity to enjoy both, regular returns and capital gains.
Power of leverage
As an entrepreneur one could need money at any time, in that case taking loans from banks for all sorts of monetary needs can be a lengthy process that is easily avoidable if you have a strong financial backup. Real estate is the one investment vehicle that gives you the ability to make down payments, leverage your capital and increase overall wealth with high returns.
It allows entrepreneurs to become independent so that they don’t have to rely on a third body or loans for expenses. Instead, you can pay for the meager requirements from the regular returns.
As a real estate investing allows you to diversify your portfolio, this can be a great means of keeping your assets secure as a growing or established entrepreneur. This way you can study the risks and returns of different investments and come up with a foolproof plan to keep your assets secure in case of an emergency.
Financial Security
Believe it or not, real estate is a proven winner when it comes to investment success. According to a leading survey, since the year 2000, real estate has outperformed the stock market with the ratio of 2:1, stocks earn almost half of the returns bagged by real estate. Although the natural process of asset appreciation can take a long time, sometimes years, real estate is one of the least risk investments.
Tips for Entrepreneurs Investing in Real Estate
While real estate is one of the best investment options out there, still most investors refrain from indulging in it for several reasons. Firstly, in India, these investments have been considered a commitment that should be taken up in the later stages of our lives, or that we have to have a lot of money for investing in real estate.
Secondly, even if someone does want to invest in real estate they are fearful and lack proper guidance. While it is advisable that one take advice from an investment manager, here are some tips that might help you start.
Watch the latest market trends
It is always good to start by watching the market trends and understanding what is best for you. Make sure that you know the answers to maximum questions before you move forward with your investment.
Prioritize your investments as per your needs and goals
A very important point to remember here is, that while you are an entrepreneur who might have a lot of money to invest, you must still have some goals and benchmarks to measure your investment success on.
Also think about how much time you can give to the investment, as an entrepreneur you may not have a lot of time to spare on the management and maintenance of your property, in that case, consider hiring a manager.
Or if you want to make a completely hassle-free investment, have a clarity of thought for that as well.
Assetmonk is a WealthTech investment platform that specializes in real estate, if you are looking for a hassle-free investment, then you can easily invest in real estate fractional ownership and real estate crowdfunding through the platform.
Make a plan
A plan of action is the third most important step in investment. While real estate is a comparatively low-risk option, a well-planned and executed diversification can also substantially change the profits you earn.
As Assetmonk pushes its investors to indulge in portfolio diversification, you can very easily approach the investment managers to get advice on the topic.
Invest from both long-term and short-term perspectives
Sometimes diversification is also very important when it comes to time-related goals. There should always be two to three categories of investments based on the time slots so that you have money when you need it, these slots could look like
- Long-term goals:- Investments for longer durations such as 5 to 6 years should be included here, invest in such a way that you may only access this money 5 years from now.
- Short-term goals:- If you need money in 6 months to a year for any reason, you can make high-yielding short-term investments.
- Emergency Funds:- These should be highly liquid investments that can be urgently encashed in case of emergency.
Fractional ownership in CRE and CRE Crowdfunding are investment options that will go perfectly for all three of these slots. As Assetmonk offers highly liquid investment options along with a very high IRR of up to 21% in Grade A property, they make investment easier and less time and energy-consuming, going well with the temperament of the Millenials investing in real estate.
