Did you know that real estate has ranked as the top investment pick for the majority (35%) of Americans according to Gallup’s annual Economy and Personal Finance survey?
This figure stands ahead of stocks and mutual funds (21%), savings accounts (17%), gold (16%), and bonds (8%) as the most favoured investment.
It may be the top investment pick, but real estate investing has its own share of risks, which could lead to a depreciation in value. It is essential to understand the true risk underlying the assets, and make planned, well-informed decisions to maximize returns.
The investments team at 33 Holdings comes with a thorough knowledge of the various risks involved in investing and the numerous factors contributing to the risks. When investing in real-estate, there is high reliance on market level performance data.
Knowledge about various assets, its corresponding returns, and the different risks involved when making a decision on property investment is essential. It is well-known that factors like differences in lease, tenant exposures, level of active management employed, activities like refurbishment expenses also play a key role and in risks and returns.
Real estate asset managers often overlook how important it is to quantify leverage and end up in over-leveraged investments. Awareness of risks involved and the edge needed to capitalize an asset is essential to ensure a return which is equal or more to the risk taken.
Learning to strike a balance between risks and rewards to begin with and adjusting the risk tolerance with experience as a real estate investor is the key to success.
How to protect yourself from risk?
While real estate investing comes with risks, it is safe to invest by making informed and nuanced choices to cover against possible risks.
Here are three basic rules to ACT upon and minimize risks:
1. Avoid making investment in locations completely unknown to you as a new investor. If you still have a specific preference, do consult us and we would be happy to assist you to make an investment decision.
2. Control and maintain your investment to minimize the risks involved. Seek advice of an industry expert to protect your personal assets from your investment risks.
3. Transfer some of your risks through insurance policies. This may be an additional expense but can protect your interests throughout the tenure.
Investing in real estate more often than not, comes with a potential to build an income stream, enjoy capital appreciation, and take advantage of specific tax breaks.
At 33 Holdings, we regularly update our knowledge about all the risks involved, the market position, vacancy rates, investment, return attributes along with market level dynamics and other aspects to help investors make the right investment decisions to maximize returns.
Engage with us now to best plan your investments.
