Property shares business options you can even put your money in cash there are so
Advantage number one is leverage so if you go to your banker and you say I’ve got a 20 grand deposit I want to invest $100,000 in shares can you please lend me $80,000 to invest in the share market what do you think your banker is going to say he’s going to say hell no I’m not going to do that that’s too risky you lose your money you won’t be able to pay us back but if you go to your banker and you say look I’ve got twenty thousand dollars I’ve found this property in a cap city for $100,000 and I want to go ahead and invest can you lend me 80 percent of the money or $80,000 to buy this property he’ll say for sure we can do that let’s just look over your finances make sure you can afford it but I’m sure that we can work something out by investing in property over investing shares or over putting your money in the bank . You can actually secure leverage which means your eternal investment can be higher
let’s look at a real life example of how this would work you’ve got twenty thousand dollars here to invest in shares and twenty thousand dollars here to invest in property with shares you just invest your money let’s say the market goes up 10% well that means that your share portfolio is now worth $22,000 so it’s gone up $2,000 now let’s take that $20,000 and leverage our bankers money to purchase a property for $100,000 let’s say the property goes up ten percent as well that property is now worth a hundred and ten thousand dollars so you’ve actually gained ten thousand dollars instead of the two thousand dollars in the share market now this can obviously work in the opposite direction and you can lose more money if you invest poorly but you can see how leverage can help you get better returns on your investments.
Advantage number two is stability by investing in theproperty market many people see this as a more stable investment and that’s why the banks are generally more willing to lend you money to invest in property than they are to allow you to invest in shares with shares and with cash in the bank even your asset is more liquid which means you can get the money out a lot faster, but when you’re investing in property it’s a lot slower process to get your money out. it’s not quite as liquid but the benefit is that the market doesn’t tend to fluctuate as heavily as the stock market does with the huge crashes and everything like that obviously the market does depreciate in times and we’ve seen that in Dubai I remember seeing that when my next-door neighbor purchased a property and then solder a year later and lost $100,000 on the property so it does happen but it does tend to be more stable than the stock market for many people benefit.
Advantage number three is that you can generate positive cash flow from your investment property so this is great because it means someone else is paying off your mortgage and you’re getting money into your bank as well so rather than investing the way most people do and invest in a negatively geared property and hope for capital gains you can invest in positively geared property which generates you a cash flow return each and every week you can then measure that return and you might get maybe a 6% maybe a 10% maybe 20% cash on cash return each year so that means all the cash you put in you’re actually getting 20% of that back each year plus then you have capital gains as well so positive cash flow property can be great because you’re getting those returns straight away and you can get capital gains as well.
Advantage number four is capital gains and what that means is that property can go up in value and we can make a lot of money that way many investors in Dubai have made their fortune in capital gains and in growth and what they do generally use a buy and hold strategy so they purchased the property and as many people say properties tend to double every seven to ten years so they hold it and as the property goes up in value then their wealth increases over time so capital gains can be a great thing about investing in property but wait a minute we get capital gains in shares as well so what’s the benefit of capital gains what’s the advantage over any other investment vehicle well firstly if you’re investing in cash you’re not getting capital gains but when you’re investing in stocks again comes back to that leverage we can purchase a larger asset in the property because we’re borrowing money then we can access more capital gains than we could potentially access in the stock market so that is something to consider,
Advantage number five is that you can make improvements to your property and increase the value I believe it would be very hard to buy some shares and then tinker away and make those shares more valuable you can’t do it but you can purchase a property that needs some TLC and you can do things to increase the value of that property when my parents were selling their house we got a valuation of that property of seven hundred and twenty five thousand dollars we then went out and spent just a thousand dollars on it and a couple of weeks work and later that property sold for eight hundred and twenty-five thousand dollars so because we were able to put that work in were able to get an increased price when we sold the property and having that control over being able to make improvements and gain that equity through you know adding sweat equity as well is a great advantage of property.
Advantage number six is that you have control over yourexpenses so when you’re investing in property you’ve got expenses like maintenance management fees council rates and all of this so one of the great things is that you have control over many of those expenses which leads into advantage number seven which is tax advantages so because you have these expenses with property you can actually use a lot of those expenses as a tax write-off and you can get depreciation on top of that as well so what it means is that you could actually be making money in your property because of these expenses and because of depreciation you might not even have to pay tax on your money or you might even get a tax saving from the government because it looks on paper as if you lost money because of depreciation but really you haven’t had to fork out that money in that financial year so tax advantages in property can’t be great.
Benefit number eight is equity growth and as we talked about in benefit number four is that capital gained but what that means is as the property goes up in value we get what’s called equity and that is the difference between the value of the property and our mortgage and that equity is great because more often than not we can borrow against that equity to go ahead and buy more investment properties so this means we can begin to build our portfolio on the equity that we have without using any cash out of our own pocket to pay for the deposits so equity becomes something that compounds and more properties you have and the more they’re going up the more equity you have to buy more properties and so this compounding effective equity can be a great advantage to investing in property.
Number nine is having control over your property and again a number nine is having control over your property when you invest in shares you have no control over how that company’s run unless you buy so many shares that you get a controlling stake in the company but in most situations and for most investors you’ll have absolutely no say on how the company is run and you won’t be able to do anything to make your investment perform better but when you own an investment property you get more control over how that property runs who your tenants are who you get to manage the property and then you can also obviously make the calls on what improvements to make on the property and you can even expand it out and maybe you’ll subdivide or develop there’s so many opportunities due to the fact that you have control over your asset and
advantage number ten last advantage is that they aren’t making any more land okay so we’ve got all these properties that they’re on the market and the truth of the matter is that they’re not making any more land the land that there is basically the land that they have unless you’re in Dubai and they’re building those islands pumping sand out of the ocean and building islands and making new land there’s only going to be a certain amount of land and so if you do your research properly and you work out the supply and demand properly of an area the chances are that you’re going to have a stable and a great investment obviously I’m never going to guarantee that and the fact that there is a limited amount of land and the population of Dubai seems to continue to grow and doesn’t look like it’s going to stop means that property is highly likely to continue going up in value so there you have ten advantages of investing in property as you can see property has some great advantages that other investment vehicles like shares or options or cash or even businesses don’t necessarily have for us So here we are here to help you out to find business growth areas in town to invest in real estate, if you’re living out of UAE, then don’t worry, we’re also providing property management service, so you will earn all the time a day even if you are sleeping, but your money flows into your bank Account, Contact us and get advantages of investing in real estate in the United Arab Emirates .