VALUE
Property value rises in time in contrast to money in a bank account, where it becomes subject to inflation and it loses value. The value of a property is determined by a variety of factors, including its location, size, condition, age, and the current real estate market conditions. Real estate markets are influenced by many factors, such as economic conditions, interest rates, supply and demand, and government policies.
When the demand for properties exceeds the supply, property values tend to increase, while when the supply of properties exceeds the demand, property values tend to decrease.
We track property values closely, as it can impact some investment decisions and financial planning. Regular property valuation can help determine the fair market value of their property, which can lead to decision to sell, renovate, or hold on to the property.
LOW RISK
Investing in properties can be considered low-risk for several reasons:
Tangible asset: Real estate is a tangible asset, which means it has a physical presence and can be seen and touched. This makes it less prone to sudden and significant value fluctuations compared to intangible assets like stocks and bonds.
Long-term value appreciation: Property values tend to appreciate over the long term. While there may be short-term fluctuations in the market, real estate values tend to increase over time, especially in growing or desirable areas.
Rental income: Properties can generate rental income, which provides a regular and stable source of cash flow. As long as the property is occupied and the rental income covers the expenses, the investor can benefit from both appreciation and cash flow.
Diversification: Real estate can provide diversification benefits to a portfolio.
Control: Real estate investors have a high level of control over their investment, as they can make decisions regarding property improvements, rental rates, tenant selection, and property management.
Even in the biggest crises people must live somewhere, while they get rid of commodities. You can invest in commodities, of course, and maybe get higher yield, however, the risk is also significantly higher and you might lose all capital. According to the yield/security ratio property investment is the best investment.
APPRECIATION
Property appreciation refers to the increase in the value of a property over time. This increase in value can be due to various factors, such as changes in the local real estate market, improvements made to the property, or other external factors like changes in infrastructure, demographics, or zoning regulations.
Real estate markets can be cyclical, with periods of growth and decline, but over the long term, properties generally appreciate in value.
In many markets, property values have historically outpaced inflation, making real estate an attractive investment for many.
There are several ways to increase property appreciation, including making improvements to the property, maintaining the property in good condition, and selecting properties in desirable locations with strong economic fundamentals.
Property appreciation can benefit both investors and homeowners. For investors, it can lead to increased equity, higher rental income, and greater potential profits when the property is sold. For homeowners, it can result in greater net worth, increased borrowing power, and more financial flexibility.
However, it’s important to note that property appreciation is not guaranteed, and there can be short-term fluctuations in property values. Factors like changes in the local economy, natural disasters, or shifts in market demand can all impact property values. Therefore, it’s important to conduct thorough due diligence and to take a long-term view when investing in or owning property.
