Of all the different kinds of investment opportunities available in the market, real estate is one of the best performing investments in modern history. Although this industry has remained accessible only to the rich for a long time, nowadays, with a set of surprisingly competitive advantages, real estate can help small-scale investors build wealth for a fraction of what it used to cost.
So who should invest in real estate? Over the years, our top real estate brokers in Dubai have worked with many individual investors from varied financial backgrounds; meaning real estate investments are now open to anyone who is looking to diversify their investments. Additionally, real estate investments ensure better cash flow and capital gains than other kinds of investments.
If you are looking to buy properties for sale in Dubai and grow your portfolio, now is the right time. With the country’s property market rising every quarter, investors should now consider investing in multiple property assets to enjoy the full range of benefits. In this blog, we will discuss how multiple property investments across all entry points can strengthen your portfolio and aid in long-term wealth building.
Diversification is the key
You may have heard all about the importance of diversifying or branching out into real estate to offset the loss of capital gains from other risky assets such as the stock market. Stock market money, for instance, fluctuates and may even tank due to unforeseen situations like the ongoing pandemic. But diversifying your money by investing in real estate will help lessen the blow on your finances, even if one industry tanks.
However, even investors have rarely explored the many advantages of investing in multiple retail assets. Just like stock investments, having your real estate investment spread across several properties will provide more security. While there are benefits to owning one big property investment over smaller ones, especially in Dubai, let us look into some scenarios where multiple property assets can do you good in the long run.
- Minimize your risk exposure
One of the biggest benefits of investing in multiple real estate investments is that it can greatly reduce your overall risk exposure. Make it a point to own different types of properties in different areas as it can help you leverage the market situation better. For instance, if you are interested in apartments for sale in Dubai, look for properties in different areas, compare prices and potential ROI before investing. Once you have a residential property to your name, look for varied real estate opportunities like commercial or mixed-use properties as your next investment plan. If you prefer to keep your real estate assets to residential properties alone, villas and townhouses are also great choices.
- Assured flexibility
Owning multiple property assets will also give more flexibility to you as an investor. With different properties to your name, you can sell one of the lesser performing ones and liquidate your investment so that it can be utilized elsewhere. Multiple property investments will give you the flexibility to cash out without blowing your entire portfolio-wide open. Selling one or more of your smaller property investments will give you desired liquidity all the while you still reap the benefits of rental income from the bigger and better-performing properties.
- Ride on better market opportunities
Having different property assets to your name will not only reduce risk exposure but will also help you take advantage of the improving market conditions. For instance, if one type of real estate is thriving, with increased rental demands, while another one is stagnant, you will gain from one while offsetting the non-profitable one.
- Start slow and steady
Many first-time real estate investors may have monetary limitations, making them find it hard to choose one kind of property. In such cases, instead of putting all your money in one basket, or this case property, shortlist multiple smaller properties and start easy. Once you have two or smaller assets to your name which provide faster ROI, slowly expand your real estate portfolio by going for bigger and bolder property investments.
How to invest smartly in multiple properties
As an investor, you must always analyze the market you are looking to invest in. When it comes to real estate, the market analysis should be an ongoing process. Before you dive headfirst into buying smaller properties left and right, research and list out all your options. Consider all kinds of properties, especially the ones that are below the market value. Not all properties are valued less as they are damaged or have other issues. Property owners may look to cash out their real estate for quick money, or even as part of their portfolio management. So, research well before dismissing property assets that are listed below market value.
Once you come into possession of a property, consider adding some value to it. For instance, if you bought an apartment, doing some renovations and improving the general state of the property will add to its value. This will be reflected in your rental rates if you play your cards wisely. Adding one or two statement changes to your property will increase your cash flow and interest your potential tenants. However, stay away from properties that have multiple issues and will cause a negative cash flow even after renovations.
Lastly, treat your property assets like any other investment; meaning, sell, when necessary. If you are in a financial crisis, selling a property at the right time for the best price will help you keep all your other investments running. So ensure that you have one or two real estate assets that are dispensable.
Real estate investments are no child’s play. Although the Dubai property market is rising and gives plenty of opportunities for investors to buy in, no business must be done in haste. Do your research, monitor the market, and connect with the best real estate companies in Dubai before making a call. So are you ready to take the next step? Talk to some of the top real estate brokers in the country with Vanguard and turn your property investment dreams into reality.