Real Estate Investment

3617 WordsOct 27, 201215 Pages
Real Estate Investment analysis Real Estate has evolved as the most profitable business over the years for those who can invest heavily in land or property and wait for their increase in value. However, the property may fetch instant cash in exceptional times like the sudden increase in value due to market reasons such as experienced just before the global financial credit crunch or due to the property’s unique location. This is classified under the short term type of real estate investment. The classification is based on the relative time spent to consolidate worth. The long term type of real estate investment therefore means that the owner has to wait for longer for the property or land to consolidate worth. (Isaac, 1998).…show more content…
Development investment types undertake investment with a view to retaining property as an investment. Purely development companies are developer/traders who sell developments on completion. Investors usually put importance on certain features such as the quality of the assets which normally involves examining the age, tenure and location of the properties, the management quality, sources of income, gearing and capital structure of the company. Real Estate Investment Trusts (REITs) Real Estate Investment Trusts are companies that buy, sell, develop and manage property assets. They elect to qualify under certain tax provisions to become owners of property and mortgages, and to pay dividends without prior deduction of corporate taxes. REITs companies work as a security and sell their products on all the main stock exchanges in stocks. Money is put directly into the business through property or mortgage. The main feature as mentioned above is that they enjoy exclusive tax consideration by the government and the returns to the investor are higher and easily convertible to cash for the investor compared with other types of investments. It is ideal for individual investors since they can directly access the stock exchange directly or through stock broker. In a real estate partnership, different investors come together to invest. Funds and resources are
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