The best way to mitigate investment risk is still akin to our old saying “never put your eggs in the same basket”. So if you are to invest on something, make sure that yo spread your investments in different directions to give a higher return that what you will gain by doing the usual investment that you are already in. These comprise diversification to add value to your product, and asset allocation to balance the risk and the reward induced by your enterprising business.
Therefore, since real estate is a share of a well-diversified portfolio, most investors get themselves involved in real estate. In recent years, brick and mortar businesses have taken a knocking, but real estate is still one of the most robust investment classes especially is the long run.
it is easy to compare the difference between the risk from buying real estate property and the risk of buying company shares or stocks. Though company shares have marginally higher capital growth, the difference in risk is huge. It works this way. When risk is measured, you need to simply measure the variation of return versus capital growth (or loss) which statistics have shown to be +40% capital growth a year and a -40% in a week. What this figures tells is that it is easier to lose money in a short time when you invest in shares. Real estate is considerably a safer investment since that sort of variation involved in risk will not affect you .
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if you compare buying a property over entering into a new commercial enterprise where you have no specialist knowledge, it covers a greater commitment because the longer the learning curve takes place, the greater the capital involved. It is easy to get started on a real estate investment. Many big time realtors started by buying a house to live in and after seeing the value of which has already increase – and realizing how much wealth they can generate from it- this in what started them of to go into this business.
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Compared to shares, real estate used to borrow will give you more loan than when you use a share product when you use a share. This means that when you have properties, you can even support your new business venture from lenders who lends up to 90% of the value of your property as security.
If you want to have a low risk investment, the investing in real property is the answer. This adds value since it includes long-term capital growth, and positive cash flow.
Other than that, you also have complete control over it as long as you can keep up the mortgage repayments.
If you are looking at a long time investment, you can renovate your real property. The risks are low on this.