Month: November 2020

Real Estate Investment

Shamir Kumar Nandy talked about Real Estate Investment

Shamir Kumar Nandy

Real estate investment is also known as property investment. Real estate is not a new investment vehicle, and it has become a popular investment vehicle over the last 50 years or so. Real estate is an excellent investment for many reasons. 

People usually have a question on what is the best way to invest money that would not be needed for ten years; real estate investment usually was chosen as the first choice. According to a survey done by Bankrate, real estate was the number one choice selected by the respondents in the best way to invest money. These findings solidify real estate is growing continually and popular over other investment vehicles.

Why is Real Estate a Great Investment?

property investment

To answer the question, here are the top 5 benefits of real estate investment:

1. Values will always increase over time.

Over the years, history keeps on proving that the longer you hold your real estate, the more money you will make.  Owning a rental property can give investors a sense of security because of the property’s appreciation in value over time. These mean that your property’s value is most likely to increase as the land and buildings are appreciating assets. However, there is no promise saying that the value of the property will increase perpetually, so it is always advised to research the location before buying any property.

2. Cash Flow

Majority people invest in real estate because of the steady cash flow they can earn in the form of rental income. Real estate investment is unlike other investment vehicles; it enables you to make like monthly side income by your tenants paying rent. If you used the financing to buy your investment, you could use the passive income to allow you to pay off your mortgage. You will get the full cash amount directly once the mortgage is paid off. Besides, the passive income also can be your huge incentive to get you to buy your first rental property. It depends on the location that you choose as once you have chosen wisely, you can secure a steady cash flow of income for a long time and even save for retirement. 

3. Diversification

A real estate investment can diversify your portfolio. If you are an investor, it is sure that you are always aware of the importance of diversification. The risk will spread out if you diversify your portfolio. The property will still serve as a safe tangible asset to remit the risk in your portfolio. Many have amassed a fortune by solely investing in real estate. 

4. High tangible asset value

You will own tangible assets when you invest in residential rentals as it can offer a hedge against inflation. However, other investments, such as stock can leave you with little to no tangible asset value, which can decrease in value over time. In general, properties increase in value through appreciation and rents increase 2-3% per year. Hence, this allows an asset that offers a monthly flow of cash and grows in value over time without being subjected to the worst-case scenario or broad economic trends like other asset classes.

5. Numerous tax benefits

Owning real estate could bring you some great tax benefits. You may get tax deductions on mortgage interest, write off operating expenses and costs, interest from financing, insurance and several items related to the property. This is why at the end of the year,  there are a lot of people who are busy with real estate as they want to take benefit of the massive tax advantages before the end of the year.

Why is Real Estate a Great Investment

The Bottom Line

Real estate investment is not only a safe financial investment; it is also an investment that can provide years of happiness and fun that will last a lifetime. However, just like any investment, it is also vital to consider certain factors before closing the deal on the house of choice.

For more recent tips on property investment, feel free to reach out to Shamir Kumar Nandy (a real estate expert with over decade of investing experience) at shamirkn9876@gmail.com.

What is a real estate investment?

What is a real estate investment?

Shamir Kumar Nandy

We have heard for a long time that most of the people have been asking about property investment. Real estate investment consists of the buy, sell, ownership, management, rental of a property for profit. A property is an asset form with limited liquidity relative to other investments, and it is also capital in a term.

People who have their real estate investment property can be very beneficial and also can become the primary source for their income. This is because, with property investment, it provides for many people cash flow, bringing them with massive returns, even after all the bills have been paid. Those who own real estate investment properties have the privilege of controlling their success or their failure.

Although real estate investment is not a new focus for the people, there are still a lot of people who do not know what to do to start their property investment. 

Advice by Shamir Kumar Nandy on the essential things to look for in a real estate

real estate investments

1. Property location

Property location is one of the most critical things key to look for in real estate investment. It also takes the longest time to look for a great place. With a good property location, it may lead you with a great return in the future. For example, the land today is peaceful open land at the back of a residential building could someday become a noisy manufacturing facility so it may diminish its value.

Hence, property location is the long term view regarding how the area is expected to evolve over the investment period. Proximity to facilities, green space, and the neighbourhood’s status factor prominently into residential property valuations. If the property is close to markets, warehouses, transportation stations like MRT station, LRT station and others are also the critical role to value high in commercial property valuations. Before making any decision, people should review the ownership and intended usage of the immediate areas where you plan to invest.

2. Valuation Of the property

Real estate valuation is dependent on estimating the value of a property for a variety of endeavours, including financing, sales listing, investment analysis, taxation and property insurance. In Shamir Kumar’s experience, he advises that there are a few common methods used for real estate valuation:

  • Sales comparison approach: It is often used to compare the recent sales of new and old properties with similar characteristics. 
  • Cost approach: This method is suitable for new construction. The formula is the cost of the land and construction minus depreciation.
  • Income approach: This method is suitable for rentals based on expected cash inflows.

3. Know your investment propose

You have to understand the low liquidity and high-value investment in real estate as a lack of perspicuity on purpose may lead to unexpected results, including financial crises.

You have to identify what purpose that you are looking for then only plan accordingly. Here are some suggestions that might suit your purpose:

  • Buy and self-use- People who have their property. They will save on rent and have the benefit of self-utilization. This will get your property value appreciation.
  • Buy and lease- This is a long-term value appreciation which offers regular income, but the landlord has to handle those maintenance fees.
  • Buy and sell (long-term)- Basically, it focuses on enormous value appreciation over a long period.
  • Buy and sell (short-term)- It is a quick profit. The property is under construction and sold at a profit on completion.

4. Aware of leverage

Property investment is a significant amount of investment and also a long-term investment, so usually, people are taking loans on it. It may come at a high cost, although taking loans is convenient. Hence, people should know how to handle loans of this nature and avoid major pitfalls.

Buy and sell

Think wisely before making any real estate investment

Every investment has its own risk. Everyone should be aware of it and invest it wisely. It is vital to consider certain factors, no matter the terms and conditions, and other charges levied by the mortgage lender before you invest in real estate.

For more advice on property investment in Malaysia, you may consult Shamir Kumar Nandy at shamirkn9876@gmail.com.