Introduction

The influencer, a successful investor with experience in both equities and real estate, talks about his experiences with real estate investment in the past year. Despite arguments from certain investors that real estate returns are low, he makes a compelling case for why real estate can be a profitable venture if one knows how to navigate the terrain.

3 Key Takeaways

1. Understanding how and when to buy property is crucial in determining the return on investment.
2. Real estate and equity serve different purposes in a portfolio - while equities contribute towards growth, real estate is more about cash flow.
3. The ability to recognize and exploit high-yield real estate deals is key to reaping significant returns.

Real Estate versus Equity Investment

Here, the influencer explains the differences and similarities between real estate and equity investment.

• The first thing he mentions is the liquidity of both assets. Equities are more liquid than real estate.
• However, he argues that equities are not always the better option. Equities are primarily for growth and don't offer a continuous cash flow, unlike rental yield from real estate.
• He challenges the notion that real estate yields are always poor, stating that if you can find properties with rental yields higher than four percent, investing in those properties could be wise.

Misconceptions about Real Estate Returns

The influencer discusses how some investors get real estate returns wrong.

• There are two ways in which property appreciation occurs - the value of the property goes up, and the rental brings in regular income. Many investors do not consider the rental yield component when considering returns.
• The influencer is also critical of studies and reports that do not capture the component of 'black money' in real estate. This term refers to under-the-table cash transactions common in real estate that avoid taxation.
• Another point that's often overlooked in real estate investing is the buy price. The influencer urges investors to negotiate and not take the builder's price at face value - a principle that applies to most kinds of investments, including equities.

Avoiding High-rise, High-density Buildings

The influencer strongly advises against buying high-rise, high-density type of projects, highlighting how these properties can be hard to sell, especially when the builder still has vacant units.

Investing with the Four Percent Rule

The four percent yield rule is a rule of thumb that the influencer strongly recommends. According to him, if a prospective property has a rental yield greater than four percent, it's likely a good investment.

Choose Wisely: It's All About Use Case

Understanding the use of a property is another crucial point mentioned by the influencer. For instance, if you plan to rent out your property on Airbnb, ensure you're buying in an area that allows short-term rentals.

Understanding Market Saturation

Recognizing market saturation is critical when investing in real estate, states the influencer. A saturated market could make it harder for you to sell off your property when needed.

Summary

In conclusion, every investment venture comes with its own set of risks and rewards. Real estate investing is no different. Recognizing the intricate details, understanding market saturation, and following tried-and-true rules such as the four percent yield rule, can go a long way in ensuring satisfactory returns from real estate investments.