The term real estate refers to land and any other physical property that is on that land such as buildings, landscaping, mines and water resources. The real estate market has gained a lot of popularity in the recent years due to it continuous growth making it the best investment alternative to many investors due to its higher returns.
Real estate investment can be effected through REITS (Real Estate Investment Trusts) or purchase of rental properties. It has surpassed other investment sectors in the world’s economy. But what are the attributing factors? The growth of real estate market can be ascribed to the following factors.
The population growth rate has continued to rise globally due to improved quality life. With the recent technological advancement and quality medical care, the world has experienced gradual population increase.
Due to the fact that land size is constant, there has been increased land demand as more people seek shelter and properties. Thus, the higher the demand, the more attractive venture real estate investments have become.
Easy access to mortgages
Financial institutions have continuously strived to provide affordable mortgages to real estate investors. Provision of funds necessary to kick start real estate projects is easily available with some of the financial institutions lending at lower rates as 10-13%.
Other features that have recently been introduced includes; the 105% financing strategy where the lenders caters for all mortgage processing cost. Loans repayment periods have been lengthened from 12-15 years in the past to a maximum of 30 long years. This has made borrowing favorable and attractive to aspiring real estate investors.
Various technological innovations such as internet and building technologies have improved the accessibility of information on diverse properties globally. Availability of low-priced and quicker methods of building, raw materials, and other aspects that pertain to real estate sector has positively transformed the industry into a lucrative business venture.
The real estate industry has received a significant boost where government worldwide has provided subsidies and tax incentives to real estate investors. This has influenced many investors to venture into real estate sectors as compared to other investment option. Various governments have also provided low bearing interest rate mortgages to its workforce thus, making it easier for them to buy properties.
Benefits of investing in Real Estate:
• Lifetime investments: The rent collected from the properties makes this a lifetime ongoing source of income.
• Collateral: The properties acts as collateral for credit when the need arises.
• Lifetime appreciation in price: Real estate has over the years appreciated in value unlike other forms of investments such as stocks’ and bonds’ earning that keeps on fluctuating. This makes real estate investment idea.
• Taxes: Property owners pay fewer taxes on the property income as compared to other sources of income hence more money in the pocket.