Direct And In-Direct Investment In Real Estate
Real Estate as an industry today is multi-faceted, yet highly transparent and accessible, therefore, is a great asset for potential buyers. Real Estate offers options of direct as well as in-direct investment to potential buyers. Direct investment includes purchase full ownership, rental, management and/or sale of property for profit and returns. It offers attractive returns for the investor who is seeking to increase their savings, or retirement funds, which gives the option of renting property in the future for a regular or stable income. Direct investment can also involve buying properties for less than market value, incorporating possible enhancements and then selling real estate for a potential profit.
However, in-direct investment involves investing in property via a third party like a property developer or a commercial landlord. It includes property bonds, peer-to-peer (P2P) lending platform, crowdfunding schemes, property funds as well as buying shares of the property-related companies. Investing in such schemes includes a repayment schedule established on factors considering how the investor’s capital will be repaid and how any potential interest on the capital will be paid. In-direct investment is more suitable for small scale investors who might not be able to buy a whole property singlehandedly even with financing. In-direct properties are also a great option for those who prefer to avoid using leverage for investments.
As per current market trends, investing in an in-direct property is considered less risky than direct property. Hence it is vital to realize that there will be a level of risk involved in both types of investments. It is imperative to understand all aspects and spend considerable time in determining the risks and available option/s before investing in real estate.
For specific real estate investment inquiries, property risk analysis, and due diligence checklists, please contact Tamer Mitwally.
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