The above very famous quote from the industrialist and philanthropist Andrew Carnegie is the bare truth even to this day. Millionaires are in plenty across the globe, but they have one thing strikingly common in their investments, Real Estate.
Photo: Night view of the fully developed city after massive industrialization. Courtesy: Wix Pictures
Interesting fact: About 47 million people are millionaires in the present day which accounts to 0.9% of the world population and they hold 50% of the world’s wealth according to Forbes.
It is very important to note that your wealth has to keep growing. Your earnings/ income should be categorized properly and an appropriate chunk of it should be invested in real estate. This will allow your wealth to grow internally and by multiple times during the course of years. But where to invest is another pertinent query one has to ponder before investing.
Many people think investing hundreds of thousands money and sometimes even millions, to buy real estate in a developed city is a smart way to grow their wealth. The truth is, its potential for further appreciation is little as property in value is already in its peak. Taking huge loans to buy a second or a third house/apartment in an already developed city would turn out to be an enormous burden on you and your family. This would be an investment with lesser returns. People think it is profitable to invest in a city already developed thinking property prices will keep appreciating in the way it did 20 years ago.
For example, some of you might have heard from your grand-parents that they had purchased the land for just few hundred notes (not even thousands) just 30 to 40 years ago, and at that time there was nothing surrounding the land. Sometimes, not even street lights! Now, the same land is not recognizable as there are plenty of houses built around, lot of commercial spaces with hospitals and shopping places are present in the surrounding colony. The current value of the property is about half a million.
Now, much of the accelerated growth has already been achieved. It would be now be a mere single digit growth year on year basis in the same location. Always study your income, savings, current property value and future prospect of it before entering with a loan to buy your intended property.
Doing a bit of research and then buying lands where there is a large scale industrialization about to takeover in the next few years, will give you the desired multiplier effect in value for your property, elevating your net worth in a profound manner. These properties could be purchased with simple savings and small loans as they not inflated. They have tremendous potential to grow.
Always invest in a place where there is more potential to grow. Upcoming cities and towns where industries are budding are zones for investment. This will cost way less, seem little more risky to a first time investor but always a best bet. When the industrialization takes place in next few years, your wealth would have multiplied several notches up. Some of our grandparents could foresee this phenomenon and made their right investments!
I would dwell a little further into identification of future cities and towns and the growth cycle of real estate prices in general in my upcoming articles.
This article is work of Mr. Narendra K. Ram (M.Sc. EE USC USA) who has been in the field of real estate. The information is based on personal experiences and expresses confidence and concern for readers/ investors as they may want to invest in the various domains of real estate. Your questions can be sent to narenkram7@gmail.com.
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