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6 Core Benefits of Real Estate over other Investments!

6 Core Benefits of Real Estate over other Investments!

There has never been a better time to invest in property! In reality, we all know that. However there are many experts who will sway you towards other forms of investments.

A large number of people know that property investment is a good choice, as a viable and financially prudent way to earn additional passive income in retirement years.

The unfortunate thing is most people do nothing with this knowledge. They have become complacent and inactive, settling for what is within their comfort zone.

In this section, we shall go through a list of 6 of what I consider the most important benefits of using Property as a tool to Build a Legacy, Touch Freedom. They are not arranged in any order of importance.

1. Creating and Holding onto Wealth!

A large amount of wealth is made or held in property. Making wealth in property is probably one of the simplest ways to build a substantial amount of assets in a relatively short space of time. However, simple does not always equate to easy. It’s not a game of Monopoly; it requires planning, strategy, dedication and above all, perseverance. Most important, it requires patience and focus that lacks in the current world of ‘instant’ gratification.

The dynamics of property make it an asset class that is a preferred way of holding wealth. The idea behind holding wealth serves two purposes:

  • It is strategic as a cash generator for you and future generations.
  • A way to beat inflation, thus preserving and growing your asset and capital base

2. Leverage

It is important to note here that property might be one of the only few asset classes that allows you to borrow against the existing value of the asset. This is not unusual, but if you look at other asset classes e.g. stocks and bonds, precious metals, etc. rarely will you find them geared or leveraged to any extent.

Financial institutions are willing to offer you finance and thus leverage on property, but the same case does not apply to a large number of asset classes.

Like we always mention during our seminars, I have not yet come across a financial institution calling me to offer Home Loan or Property Finance! In most cases, I receive a call for Credit card, Personal Loan, etc. which equates to really Bad Debt!

3. Growth and Appreciation

Appreciation for property is a major and integral aspect that contributes to the reasons why property has been seen as the darling class of investment. Based on the location and cash flows, a good property will grow in tandem with the markets and over time, should outdo most of the other asset classes.

In addition, property tends to beat the existing inflation rates thus ending up with higher growth than the rate at which other asset classes are growing. Property is therefore said to be indexed to inflation.

Growth in property is further compounded by the concept of leverage as discussed above. A lot of people will argue that stocks offer the same growth and could even beat property. While this might be true in certain cases, some stocks have far out-performed property growth by a wide margin. However, when you factor in the Leverage you have on property, you would need to get multiples of your stock investment to beat property!

4. Forgiving Investment

In my view, property is a forgiving investment. Mistakes made when choosing a strategy, implementing tactics or making an outright cash purchase are much easier handled and less impactful as opposed to other investment classes.

Some people have experience with stocks as an asset class and might have been lured into trading as a way of ‘investing’. With the advent of the Internet, a lot of people have even traded in derivatives such as Options and Warrants. For those who have, I’m sure you would agree with me that it is nerve-wracking and comes with a very sobering responsibility; that you could lose your whole capital outlay as well as what you do not have.

5. Building a Legacy

Properties are long-term investments. When talking about a legacy during our seminars, our definition here entails looking at the long-term prospects of the properties outliving our personal lives. This implies that beyond mere living, your descendants will have assets, possessions and an estate that you have molded and shaped. This legacy becomes a heritage and bequest that lives on beyond your current life.

Apart from businesses listed in the stock exchange and solid family businesses, one of the simplest and easiest ways of building a legacy is through a well-structured property portfolio. A simple explanation here is that most properties will well outlast our mortal lives. Then why would you not want to leave them in the family line? This also brings in the right structuring using Twin Trusts Structures and expert advice on succession.

6. Passive Income

Acquiring a passive income stream is one of the most common goals that almost everyone has – either explicitly or implicitly! In my reading and extensive interaction with people, I have not come across anyone not interested in passive income. To the young, it is a fallacy. To the older generation, they call it retirement income.

Property is a great creator of Passive Income. Without a doubt, there are fewer options where passive income and progressive capital growth is easier to achieve than in property.


About Dr. Chomba Chumadr chomba chuma

Dr Chomba Chuma is an experienced property investor and has used his vast understanding and lessons learnt from past mistakes to put together this indispensable read. What stands out is his emphasis on building a portfolio that will leave a legacy that outlives the investor. He continuously shows the wisdom of this approach and is very persuasive in his arguments for following this advice.

After reading this book, the reader will see the foresight in not only using property to reach financial freedom during their lifetime, but also using it to leave a lasting legacy for generations to come!

He has done it over and over again in Property Investments! Why would you want to re-invent the wheel? Learn from the expert and Start Your Portfolio Now! More information