You see new buildings springing up near your abode or place of work and ask yourself why you should invest in real estate in Kenya. You notice more coming up along the way. Some are apartments. Others are maisonettes. There are bungalows too. Some contractors are putting up commercial buildings. Others are busy erecting industrial complexes.
While observing these real estate developments, you wonder who owns them. You longingly look at the properties and wish you could own at least one.
Take heart. You can, actually. You too can invest in real estate and reap benefits. Why not?
But maybe you first want to understand why you should invest in real estate. You want to be sure you are putting your money in a worthwhile, safe investment.
Let’s explore a few simple reasons why you should consider investing in real estate.
A SOLID INVESTMENT?
A quick answer is ‘yes’. Just like the land on which it sits, real estate is a solid, stable, and non-volatile investment. It has intrinsic value. We all know that land is valuable and keeps appreciating because it is a limited resource. No one can create more land. Real estate will, therefore, always be valuable. Remember that it is built on solid ground. Take note, then, that at no time will real estate be worth zero shillings.
When you put money in houses (whether maisonettes or bungalows), apartments, commercial properties, or other types of real estate, you are diversifying your investment portfolio. You are following the old adage, “never put all your eggs in one basket.” You can further diversify your real estate portfolio by investing in different locations or in diverse properties.
EARN REGULAR INCOME
Everyone needs another source of income. Don’t you? Build or buy rentals and you are assured of yet another source of regular income. You may also decide to build or buy to sell and to use the money to buy more properties for sale. You become a real estate dealer.
OWN A HOME
Maybe you belong to the group of investors who believe owning a home is an investment that gains value over time. Property prices keep rising. You are not wrong. Indeed, owning a home is a worthwhile investment. Also, since you will be living in your house, you can use the money you would have paid as rent to invest in another asset, maybe own one more house!
HEDGE AGAINST INFLATION
Real estate can provide a powerful hedge against inflation. Note that, as prices of commodities go up, rents go up too. The value of a well-managed property will continue to appreciate with the passage of time.
GIVES YOU LEVERAGE
Just tell a banker you want to borrow money to invest in property and his/her eyes will light up with excitement. The reason is simple: you can borrow more when using the property as security. Lenders like property. This makes it much easier to borrow to invest in property than in any other asset class.
Investing in real estate will give you long-term financial security. You are assured of a regular income well into the future. And do not forget that the property keeps appreciating, meaning that your income will be growing over time. Your property will be worth much more as the years pass by.
RETIREMENT & TAX PLANNING
You can plan for retirement by investing in real estate. The property you buy today will be a source of steady income when you retire from your current job.
You can also structure your property in such a way as to reap tax benefits that are not available to other classes of investments.