Investing for Beginners .EU, investing

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Peter Lynch

Investment in Property

Investment in housing and commercial real estate


I don‘t know why, but historically in most places almost every countryman becomes to a property investment expert, or at least he thinks he is. And perhaps that's quite easy to explain, knowing how popular investing in real estate is. It must be recognized that different nations have different approach to a property as a living place, and for example very few Lithuanian can even imagine that they could spend the life in rented apartment. It is difficult to say why such an approach has developed, but often it is based on myths or distorted facts.

Real estate property can be a really good investment, but also may be a poor one. To assess whether the real estate a reasonable investment is, there should be attention paid not only to a property price changes, but also other important factors: rent yield, repair costs, depreciation of main constructions, furniture and other equipment expenses (if the property is rented with all these things).


Only after proper measuring and calculations we can say whether real estate is a good investment and it will depend mostly on market conditions.

The most popular real estate investment segments:

  • Residential property (housing)
  • Commercial property:
    •  Retail property
    •  Warehouses
    •  Offices
  • Investing in land (any purpose)Investing in land (any purpose)

 

Especially a lot of knowledge and diligence requires investment in land, which is generally riskier than investment in buildings with cash flows. There are some more segments of real property (like industrial) but those are not as popular as investments.

 

Investment in real estate is possible not only directly in the property, but also through real estate development companies or through REIT (real estate investment trust).

 

 



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