Real estate investment is something that many people consider doing as a stable and solid means of generating future profit. And whilst it certainly can be, this is by no means guaranteed. As with any investment, the key to success lies with thorough research and expert advice.
Potential problems
The most common problem faced by real estate investors is unsustainable negative cash flow. Perhaps you required greater capital than you first thought. Perhaps you bought a property to rent out, but it took longer to find tenants than you had planned. Perhaps the amount of money required to repair or refurbish the property was greater than you had anticipated.
If you are looking to invest in real estate, it is imperative that you are financially fit and have planned for all contingencies.
Where to invest?
Clearly there are a number of factors to consider when deciding where to buy real estate:
- What kind of property are you looking to buy: commercial or housing, apartments or apartment buildings?
- How much capital are you free to invest?
- The stability and potential of the market. It is no use buying a property in a region or country whose economy is doing poorly.
- The potential for future profit. It is no use buying a commercial property in an area that is seeing only a growth in the residential market, and vice versa.
In terms of international real estate, there are some really interesting emerging markets in South America and Eastern Europe, including in countries such as Panama and Moldova. These are both areas that are seeing increased urbanization, a growth in tourism, and great export potential. It is also worth looking at the economy of the country in which you are considering buying real estate in comparison to its neighbors and major trading partners.
Investing in the Middle East
A recent article listing the 20 best places in the world to invest in real estate noted two countries in the Middle East as worthy of particular consideration.
The United Arab Emirates is a market that is ripe for investment. Over the last three years, property prices in Dubai have risen over 30%. This is particularly true of high end and luxury properties, as a growing middle class contributes to the country’s improving economy.
When it comes to investing in the Middle East, it really helps to have a brokerage or investment firm that is familiar with the region and understands its nuances; for example, the proposed financial-free zone on Abu Dhabi’s Al Maryah Island or the imbalance between the supply and demand of high-quality office space in Dubai. One such firm that can be of assistance is the Kuwait Real Estate Investment Consortium, which manages real estate investment assets across the Middle East. The company’s chairman, Fahad Al Rajaan has a wealth of experience in the investment sector as well as finance and real estate development in the region.
Turkey has growing investment opportunities – particularly Istanbul, which is seeing increasing amounts of investment coming from other Middle Eastern countries.
Real estate investment may sometimes be seen as a sure thing, and the internet is a great resource, but nothing is more important than excellent investment advice.
