REAL ESTATE INVESTMENTS AT A GLANCE
A property is considered a safe and profitable investment. It should not be missing in any portfolio if you want to save assets. Often one even hears the term “concrete gold” when referring to real estate . It makes it clear how popular buying a properties for sale in Dubai. But how can you invest in houses or apartments? It is not always necessary to buy your own property. There are interesting alternatives that are just as safe and profitable.
INVESTORS SHOULD KNOW ABOUT THESE FIVE REAL ESTATE INVESTMENTS
Before deciding to invest in houses or apartments, the alternatives must be compared. In principle, there are five different ways of investing in concrete gold.
You can choose to purchase:
Real estate stocks
Real estate bonds
Real estate funds ( open / closed real estate funds )
Equity crowdfunding in real estate
What are these individual investment opportunities all about?
THE REAL ESTATE PURCHASE
Buying a property for sale in Dubai is arguably the best-known way of investing in concrete gold. The investor can use his own home himself and does not have to pay rent after a few years of age. He can also rent it out to a tenant as an investment.
THE REAL ESTATE STOCK
Anyone who wants to invest their money in stocks in the real estate business can buy shares in stock corporations that are active in the real estate industry. Such companies develop, build, operate and market houses. These are mostly multi-family houses with commercial or residential use.
THE REAL ESTATE BOND
Real estate bonds are fixed-income securities . They are usually secured by a mortgage. A bond is a debt security. A bond is usually subordinated collateral. This means that in the event of bankruptcy, all outstanding claims of the creditors will be reimbursed first. A bond is therefore a real estate investment or properties for sale in Dubai with a certain level of risk. It is not suitable for every investor .
THE REAL ESTATE FUND
If you want to invest your money in real estate at manageable costs (here more about costs for investments ), you might decide in favor of a fund. With a fund, a fund manager collects money in order to invest it in various objects. He looks for properties with a high return . As an investor, you have the choice between open and closed real estate funds.
In an open real estate fund , the investment volume is usually unlimited. Fund assets grow when new investors invest money. For the investor, the costs of an open fund are usually manageable.
A closed real estate fund is characterized by a limited volume. Once all the shares have been sold, it is closed. The investor must hold his share until the end of the term. In the case of closed-end funds, a minimum investment is usually required. This means that the investment volume per investor is higher.
EQUITY CROWDFUNDING IN REAL ESTATE
The Real estate companies in Dubai equity crowdfunding in Dubai Is still a relatively unknown form of investment. With this type of investment, a single investor does not have to raise a large sum. A real estate investment is already possible with small amounts. Nevertheless, the return is attractive. Real estate crowdinvesting is a form of investment that was previously reserved for institutional investors.
FIVE CRITERIA DETERMINE AN INVESTMENT
As an investor, you should look at the following five criteria in order to assess a capital investment.
Risk diversification: No investor should put all of their money into a single investment. In order to reduce the risk of losses, it makes sense to distribute the amounts over several investments. If you put everything on one card, the risk of losing all of your money increases.
Minimum investment : The minimum investment determines how much money you have to invest. Anyone who can invest 50 euros per month has other investments to choose from than an investor with a volume of 5,000 euros or 10,000 euros. For small investors, an open real estate fund or crowd investing is ideal with a monthly contribution of 50 euros. If the volume is higher, you might buy your own property or a closed fund share.
Capital commitment: Once the money has been invested, it can no longer be accessed. Therefore you should only put on what you don't need. A strong capital commitment reduces flexibility. This is something to think about before choosing an investment.
Costs: Every investment comes with a cost. Sometimes there are expenses for the brokerage, for the broker, for administration or for maintenance and modernization. Before closing, one should compare the costs.
Codetermination: For some investments, investors have the right to codetermination. With other investments, decisions are left to a professional administrator or manager. Which choice is right depends on how much you want to influence as an investor yourself.
THE RIGHT REAL ESTATE INVESTMENTS FOR EVERY INVESTOR
The variety of financial investments makes it possible: There is at least one suitable option for every investor to invest in real estate.
REAL ESTATE PURCHASE IN DUBAI
Anyone who buys a house or apartment in Dubai for their own use or as an investment naturally has no risk diversification. The buyer invests all of the money in a single property. Those who want to live rent-free in old age opt for self-use. If you want to expand your financial leeway, rent the property. However, the entire assets of the investor are often tied to a property. The costs are incurred for the purchase, for the management and for the maintenance. It is therefore important to carefully consider whether a property is the right investment. It is suitable for investors who want to invest for the long term.
REAL ESTATE STOCKS
When buying property stocks, you need to look at a variety of securities. You also need to take into account the fact that prices have risen sharply in the past. No one likes to judge whether a price increase will continue or not. However, stocks remain an attractive investment with the potential for long-term returns.
By issuing bonds, a company raises money from outside sources. The ability of investors to collect the borrowed money depends on the creditworthiness of the issuer. Therefore, there is a certain amount of risk associated with bonds. Many bonds have complicated contractual forms that are difficult to understand. Therefore, bonds are generally not suitable for newcomers to the real estate industry.
REAL ESTATE FUNDS
It is possible to invest small amounts in open-ended funds. Equity investments are controlled. By incorporating multiple properties into a fund, risk is diversified. Therefore, real estate funds are suitable for investors who seek stable returns over the medium to long term. Closed-end funds involve large and long-term capital commitments. They are rarely chosen by retail investors because of the risks involved.
EQUITY CROWDFUNDING IN REAL ESTATE
Crowdfunding allows investors to participate in attractive return opportunities for small amounts of money. The funds raised are manageable. The risk differential is high and the risk of loss is fairly low. Therefore, crowdfunding is ideal for individual investors who want to invest for the medium term.
THE RIGHT ALTERNATIVE FOR EVERY INVESTOR
Real estate companies in Dubai investments are very diverse and there is a suitable solution for every investor. Real estate crowdfunding is especially interesting for small individual investors. This type of investment can be made in small amounts over a reasonable period of time, the returns are very attractive and the risks are acceptable.