The property business proved to be a lot of successful people. The interest of rich people to pursue the property business is none other because it has a myriad of advantages. What are they?
1. Added Value
Value added property investment is obtained due to the development of buildings on a vacant lot. Value added will be higher, if the building is in strategic location with good access and facilities, and made with beautiful architecture.
2. Increased Annual Income
From a plot of land developed, an investor can receive the lease. Another advantage is the increase in rental rates, because the nature of the scarcity of land and property will continue to occur as long as the economy in a country continues to grow.
3. Increase of Land Value
Appreciation of land value is another advantage of property investment. The number of people every time continues to grow, while the amount of land can not increase. This is a classic theory that simply explains why land prices continue to climb from time to time.
4. Long Term Investment
Compared to deposits, gold or other investments, the property has a long-lasting character. The property business has a horizon (duration) of an average investment of 3-5 years and rises between 10% to 20% per year.
5. Protection against Inflation
Traditionally, people buy land and buildings to keep these investments from being eroded by inflation.
So investors are sure to buy property, the value of investment will not go down like the value of the currency eroded inflation. Even because of the nature of its scarcity, the value of that investment continues to increase over time.
6. Good Collateral
Unlike financial investments, property is the most solid collateral or guarantee. Even in some countries, banks do not hesitate to lend funds up to 80% of the value of collateral.
7. Pride of Ownership
Compared to other types of investment, the sense of ownership of property is generally higher. So ancient, landlords were associated as rich people. This is because the property can also generate income from the lease.