What Do People Sometimes Forget When Investing In Real Estate

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That investing in real estate is no different from investing in shares: the higher the expected or predicted return, the higher the risk. Your investment in investment property may yield significantly more returns than your savings account, but the risk of setbacks is also considerably higher. The real estate world lures private individuals with high returns (‘let your savings pay off again!’) But in reality, the net return is often much lower. Choosing bukit jelutong condo is a good option in this matter. Making a residential move and looking for the ideal property for the family is a real adventure. There are several options on the market and, at first, you may be lost amid so many offers.

But, after all, how to best choose the perfect property for your family in the face of so many possibilities? In order not to end up making the wrong decision, you need to be aware of a number of issues.

Buying Real Estate For Rental Involves Various Risks

Think of the loss of income due to temporary vacancy or high maintenance costs. In the absence of diversification (read: one object), that risk also has a major impact on the return. And then of course there is also the tenant. Not every tenant is in arrears with payment, causes inconvenience, or starts a cannabis plantation in your home. But it will happen to you. And when you want to say goodbye, the tenant may also be able to fall back on rent protection.

Investing in real estate can suddenly also is confronted with new laws and regulations, such as the less favorable tax plans that will apply in Box 3 from 2022.

Why Is Diversification So Important When Investing In real estate?

If there is one golden tip for every form of investing, it is: spread your risk. The motto not to bet on one horse also applies to investing in real estate. Those who have gone completely for retail properties have been hit hard by the vacancy rate due to the rise of internet-shops and more recently a large number of bankruptcies or closed holiday parks as a result of the corona crisis. This crisis has also resulted in a decrease in the number of ex-pats and thus a decrease in demand on the rental market.

Conclusion

Spreading is not for every private real estate investor, but if you have the opportunity, have a balanced portfolio and invest in different types of real estate and in different segments. If you invest through a good asset manager, this spread is carefully covered.

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