When you are looking for a way to make money, it can take time to know where to start. Investing may be tough for individuals who are inexperienced with it. It is beneficial to devote the necessary time to learning about it by conducting research and reading. Should you lack the opportunity to do so, you can benefit from involving a financial expert to assist you with your investment. For beginners, an investment in real estate is a great way to get started on the path toward financial independence and stability. Real estate investment is a great way to invest and earn a return. But what if the stock market is going through a rough patch? It may feel like the only way to make money is to invest in real estate through stocks— but that is not always the case. In fact, there are many ways you can invest safely in real estate amid a drop in stock market prices. With all of the uncertainty in the stock market today, it is more important than ever to find investment opportunities that are safe and secure.
But even with all of these options available, investors should still take caution when investing in assets that could be affected by fluctuations in the stock market. For example, putting all your eggs in one basket could mean losing out on an opportunity that comes along later on because the stock market has not recovered yet.
Here are three ways you can invest safely in real estate through stocks amid a drop in stock market prices:
1. Do your research.
In broad strokes, research is the starting point in every real estate investment. Look for properties that will appreciate in value over time. This means buying properties that have been well-maintained and have lots of potential for growth as time goes by, not just any old house. When you are ready to sell your investment property down the road, it will be worth more than what you paid for it originally—and this is true even if stocks go down further than they should. Purchasing a home in Metro Manila generally is always greater in cost than in rural places. Nevertheless, prior to investing in cheap properties in a provincial area, you should think about ease of access, nearby conveniences, the potential for growth in the surrounding area, and other enticing qualities to easily search for potential buyers. Concentrate on locations where buying real estate properties generates a better investment than constructing or reworking an existing house. Such may allow you to save money on construction and labor, providing you to make the most of the earnings from a transaction.
BRIA Homes offers houses and lots at very affordable prices. The major attraction is that BRIA Homes has over 50 project locations around the Philippines, so you may buy or rent a BRIA house anywhere in the country! BRIA Homes is currently expanding its initiatives in both south and north of the Manila metropolitan area and is presently encouraging ambitious investors to visit BRIA Homes in Iriga, a rural city in the southern region of Camarines Sur. BRIA Homes Iriga is approximately ten minutes from Iriga’s city center, which is recognized as the area’s academic core, having around ninety public and private educational establishments ranging from primary schools to colleges. The city also has modern healthcare providers and other healthcare resources that are easily reached by any mode of transportation, as well as all of the vital features that BRIA residents will require to live a genuinely well-rounded existence. BRIA Homes focus on building affordable houses and lot packages for average Filipino families that desire to purchase their own houses. It has evolved into the ideal option for regular Filipino workers looking to purchase a good-quality yet affordable house and lot. Visit the BRIA Homes Official Website to reserve your own property today!
If you are presented with an opportunity, consider investing in a range of properties in different parts of the country. Diversifying your portfolio can assist you to have fewer risks if any of the regions see low-interest rates at any time in the future.
2. Account for the rise in the cost of living in your budget.
When planning for the purchase of the real estate, remember to account for the increasing cost of living. Furthermore, while property prices may rise during times when there is high inflation, these may also fall if the global economy suffers.
3. Invest through Real Estate Investment Trusts (REITs) or fractional ownership.
One of the best ways to invest safely in real estate through stocks amidst a drop in stock market prices is through REITs (Real Estate Investment Trusts) or fractional ownership. Investing in rental properties is an alternative to fractional ownership or REITs. Real Estate Investment Trusts (REITs) are large companies that own and operate apartment buildings, office complexes, and shopping malls. A REIT entity is founded by a Sponsor, who offers and shares income-generating real estate properties with the REIT enterprise. The sponsor obtains stock ownership in the REIT corporation in return for the property. They generally pay dividends on their stocks and use those funds for investments in real estate around the globe. When stocks are falling, more people are likely to buy real estate because it is a cheaper alternative than stocks or bonds. That means there will be more demand for REITs and thus higher returns on their shares. As stated in Section 5.1.a. under the SEC REIT Implementing Rules and Regulations (IRR), the sponsor has to market at least one-third of the REIT’s existing capital stock to the investing market. In the Philippines, the proceeds of a transaction such as this must be invested again within the country.
There are a number of benefits to buying shares in a REIT:
You will be able to diversify your portfolio.
You are not just investing in one property or one industry, you are investing in hundreds of properties across multiple markets and industries. In addition to real estate, you can also put your money into stocks or bonds—and if you want to add some more diversity, consider international stocks or commodities like gold and oil futures. If one sector tanks, it does not wreck your portfolio as long as other sectors are doing well.
Returns are distributed to the investors in the form of dividends.
Most REITs pay dividends every quarter, which means they give back some of their profits to shareholders—so if you buy their stock early enough, you will see an even bigger return than if you bought later.
A key drawback of REITs is that you cannot select your most desired property. On the other hand, you are free to decide how much you want to invest in any real estate you choose with fractional ownership.
As a beginner in investment, purchasing a real estate property should be your top goal. It is a strategy that may benefit not only you but also your loved ones. It is a volatile time to be in the market for beginners in real estate investment, but that does not mean you should be discouraged to invest. If you have plans to invest in real estate through stocks, the current rise in inflation may actually provide a chance to invest in a profitable long-term asset. If you decide to invest in a house and lot, you need to take your time to do your research and talk with a financial expert prior to arriving at any choices.
Written by MC Sanchez