The real estate industry in Kenya needs more female investors as women traditionally have not been as likely to invest in real estate as men.
One of the finest methods to accumulate wealth is through real estate investing, and there are many different approaches one may take; you can buy a multi-family property as a long-term rental, buy a house to use as a short-term rental, or invest in a Real Estate Investment Trusts (REIT), which functions like a mutual fund for real estate.
Whichever method you choose, adding real estate to your portfolio is a crucial component of a bigger investment strategy for not only women but both genders.
The advantages below have been explicitly highlighted to guide women in starting their real estate investment journey.
- It can positively affect your personal finances
Your financial situation can be greatly enhanced by investing in real estate and other types of property. You might someday be able to completely fund your lifestyle from your investments if you can create a strong investment portfolio that includes a sizable portion of real estate.
You might be able to achieve your goal of financial independence more quickly if you invest in real estate. Even in the short run, you can boost your existing income, and eventually, you might be able to replace your current work. If you’re able to increase your earning potential, if you earn money, you might be able to live with the same freedom in other areas of your life. For instance, if you don’t have to work in a traditional environment and that’s what you’d prefer to do, you may be able to spend more time raising your family.
- Long-term security
Real estate investing can assist women who are looking for solutions to create and maintain a sense of long-term financial security.
You can generate a consistent cash flow while also knowing that the value of the property is quite likely to increase or improve over time. Although there is no assurance, trends show that real estate is typically one of the safest investments you can make. Purchasing real estate is not a quick investment. What you should truly be focusing on is the increase in value of your property or capital assets over time.
- Protection against inflation
Inflation is at record-breaking levels right now, so it’s a topic that many women are thinking about right now. Real estate can act as a hedge against inflation when you invest in it. You can alter your investment methods in an economy with rising inflation. You can choose, for instance, how much rent you’re going to charge each month to ensure that it increases in line with inflation.
When inflation is strong, your property values will probably increase as well. Your financial flow may decrease as living expenses rise.
- Your skills may be well-suited to real estate
You might not be aware, as a woman, that you already have a solid skill set that you might use to become an investor. Investing in real estate, especially if you plan to rent it out, requires a lot of organization, which you might be good at. You might be an effective speaker as well as a skilled negotiator. Women also frequently excel at building relationships, so if you want dependable long-term tenants, this ability will be helpful. Building relationships is a big part of the real estate business.
Leverage is a strategy for using debt or borrowed money to boost the potential return on your investment. Leverage is a tool used by both individuals and businesses to increase earnings while also increasing downside risk. Using your own money to access leverage is the easiest method. With a mortgage, if you put down 20%, you own the entire property. You might even be able to lie down less.
A 20% down payment would cost 1,000,000 on a 5,000,000 house. The remainder is then borrowed. You’re making a purchase with a small amount of your own money by doing this. The lender contributes the most. If the value of the property increases Your net worth increased to 5,250,000 in that year if it increased in value at a rate of 5% per year.
Assuming the same appreciation rate, if you paid cash for a 1,000,000 property, your net worth would increase by 50,000 over the course of a year as opposed to 250,000 if you had bought the costlier property.
Real estate can be used as security because it is a physical asset, making financing simple to obtain.
A well-diversified investment portfolio is a good one. Real estate is a crucial part of investment since it frequently has a low or even negative correlation with other asset classes. This implies that the value of real estate might increase even if other investment asset classes experience a decline. When real estate is a part of your portfolio, its volatility might be decreased.
- Building wealth and equity
Equity is created as you pay off the mortgage on a home you purchase as an investment. The leverage to purchase multiple properties comes from your ability to generate equity, as was previously indicated. This enables you to keep building your wealth and cash flow.
Women may be reluctant to make real estate investments. Women are often less risk-averse investors than men are, but now may be a good moment to think about adding real estate to your portfolio if you want to create long-term, sustainable wealth for you and your generation.