Why Real Estate is a Bad Investment Unless Done Right

It is always the right thinking pattern to analyze the present and think about the future, developing both the main and plan B for it. Investing has always been a good idea, and better when done right. If you are considering real estate investment and wondering if it is a bad or right choice, this article is for you, because Nawy will tell you why the “time” factor plays an important role in your decision.

We will also give you a detailed guide to the pros and cons of investing in real estate.

Why Real Estate is a Bad Investment

Many factors are important when you are thinking of investing in real estate. If you are still in the deciding stage of whether to do it or not, you need to educate yourself first about the field to know its drawbacks and strengths.

Some people think that real estate is a bad investment, and we will tell you why they believe so.

1. A high primary cost is needed.
2. The illiquidity of real estate investment.
3. Market volatility and fluctuations.

Now, let’s get into every point of why the real estate field investment is a bad decision in detail, and tell you how you can work it your way.

1. The Initial Cost is High

The main reason why people think real estate is a bad investment is the finances you need to initiate it. The down payment may be the easier part of the equation, but the costs run for some time, which is its downside.

However, real estate developers have made it easier and more convenient. They implemented various flexible and long-term payment plans for properties.

2. Illiquidity

Owning a real estate property is an illiquid investment. Some people think that this is why real estate investment is a bad choice. They would rather put their money in a more liquid so that they can gain its benefits over a long interval of time. Not to mention that if you decide to sell your property, it will probably take you some time to.

However, such a disadvantage can actually work in your favor. The buildings’ costs may depreciate, but never the value of the land it is on. Your property value may even rise higher than the inflation rate.

For example, investing in any of the East or West of Cairo’s prestigious destinations, such as New Cairo, will work better than you expect, especially when it comes to the most distinguished real estate commercial projects.

3. Market Volatility and Fluctuations

The future is unknown, but it is well known that the real estate field is less volatile than the stock and gold market. The thing is, one of the reasons why real estate is not a bad investment is that it is directly affected by market fluctuations.

These are the main reasons why people believe that it is a bad decision to think of real estate investment, and we told you how they work in your favor.

But the pros of putting your money in the real estate market don’t stop at the bright spot of why others think it is a bad investment.

Pros of Investing in Real Estate

The benefits of real estate investments outweigh why it is a bad decision because they include:

1. Steady income.
2. Long-term appreciation.
3. Investing in a tangible asset.
4. Real estate returns values.
5. The increase in demand for real estate.

Let’s get into the details of each point.

1. Gaining a Steady Income

One of the biggest advantages of investing in the real estate market is actually watching the money you put in your property return to you. You can rent the unit you purchased and gain a constant cash flow.

Real estate investment perks don’t exclude that you can also be the one using it, and that’s one of the benefits of investing in a commercial unit. Taking your business address to, for example, El Sheikh Zayed, will elevate your work status and increase the income you gain from the services you provide.

To put it all in a nutshell, investing in the real estate market will grant you passive income.

2. Long-Term Appreciation

The value of real estate increases over time. This will be beneficial to you when it is time to sell your investment, especially if it is in a project by one of the leading real estate gurus in the Egyptian market, with a high-end portfolio of commercial and residential projects, such as:

• Ora Developers
• SODIC
• Al Ahly Sabbour
• Mountain View
• Talaat Mostafa Group

3. Real Estate is a Tangible Asset

One of the benefits of investing in the real estate market is that you will put your money into something tangible that is guaranteed to increase in value.

Furthermore, when you resell or renovate your property, this may need more upfront finance but will increase its return on investment (ROI) value. This isn’t the only factor that plays a role in a higher ROI though.

Many elements affect the ROI value of your property, such as:

• The location
• Your investment strategy
• Economic indicators

4. Real Estate Returns Value

As mentioned above, the ROI of your property is influenced by many factors.

• The location of the unit you invest in plays an important role in its value. Putting your money now into a property in a new city would return positively on you in the future when it is a lively community. Furthermore, picking the right location when you decide on investing in a commercial unit will be of dozens of benefits for both your work and your real estate investment.
• The second element is your investment strategy. Patience and knowledge of the economic status will be beneficial when you think of buying and selling your property.
• Economic indicators also play a crucial impact on the ROI of your property, such as the increase in the dollar’s value.

5. The Increase in Demand for Real Estate

Economic indicators don’t only influence the ROI of your property but also the demand. When Egypt’s economic status expands, real estate becomes a necessity.

The real estate market is affected by the fluctuations and inflation rates. Despite being believed as one of the cons of investing in real estate, the demand itself drives the rent rates higher, reflecting on your passive income.

With a detailed guide to why real estate investment is a bad decision and how its benefits outweigh such cons, are you ready to take the decision? If your answer is “Yes”, there are some aspects you should consider.

Best Way to Invest in Real Estate

The best way to make sure your money is put in the right market is to educate yourself.

• You have to think about the location you want to purchase the property in, and how its value increases over time.
• Moreover, the type of property you will invest in plays an important role in your investing journey.
• Careful financial planning is the key to investing properly, and Nawy has made it an easier process.

Nawy Shares is a distinguishing service offered by us, assisting everybody looking forward to investing in the real estate field in Egypt. If you can’t financially buy a whole property, you can invest via the service by buying shares in a unit, and online track your income and investment. That’s how you can start investing in the real estate market with a little money.

Nawy’s team of experts will help you throughout all your real estate inquiries and assist you purchase your property effortlessly. Contact us now via WhatsApp to purchase your property in any of the high-end projects on our website and they will reach out to you in no time.

Nawy will assist you in investing in the real estate market in the right and seamless way.