Investing in
residential property is an investment product with very high returns. However, property investment also requires a fairly substantial amount of funding, since property prices are quite high. Many people are shifting to the property sector to earn higher returns.
If you want to invest in property, you will need a sizable amount of capital. However, the returns can be many times higher. Some financial experts say that investing in residential property, land, apartments, and so on is better than investing through finance or banking. Robert T Kiyosaki agrees, arguing that rather than keeping money in a bank, where inflation erodes its value, it is better to invest it in residential property or land in a developing area. What are the benefits of property investment?
- Value Appreciation
Residential property tends to gain value over time. This added value can come from development, where a property is built on vacant land and can then be used to generate multiplied returns. For example, a cafe built on vacant land in a strategic location with good access. In addition, the building can be enhanced with attractive architecture. As a result, a business operated from that property can generate high returns. Furthermore, because of its strategic location, rental prices will differ sharply from those of properties on the outskirts of the city that are not in strategic locations.
- Rental Income
Residential property, land, apartments, and so on can be rented out to people who need them on a long-, medium-, or short-term basis. As a result, property investment provides a regular income stream. Land prices rise every year because of their scarcity, and rental prices rise along with them. One reason people invest in the property sector is that it can provide steady, regular income. Property investment can also be used as passive income. In other words, investors can earn returns every month without working. Once a property is built, it can also be rented out like a kos-kosan (boarding house). As a result, investors do not need a job that ties them down or demanding physical work to earn a steady income.
- Long-Term Investment
Residential property investment is a long-term investment, typically held for three to five years or longer in order to generate meaningful returns. This stands in sharp contrast to mutual funds, gold, time deposits, stocks, bonds, and other investments, which are mostly short- to medium-term.
- Collateral Advantages
Property is one of the valuable assets that can serve as good collateral when borrowing money from a bank. It is not only true in Indonesia; in developed countries, property is also regarded as a highly advantageous and sound form of collateral. Owners can use their property as collateral for a bank loan of up to 80 percent of its collateral value. It is also possible to buy land or foreclosed properties from banks. Auction prices for properties range from Rp 70 million to Rp 100 million. If you have surplus capital, there is no harm in trying property investment by buying foreclosed or auctioned properties from banks. Low price, high profit.
Read also:
5 Benefits of Property Investment You Should Know
