Posts Tagged ‘property’
Why Real Estate Profitable
Why Real Estate Profitable
Using other people’s money or the use of financing is one of convenience that can only be used in invest into the property. But apart from that there are many benefits of investment in the property which makes it very interesting to compare other investments.
Cash Flows, “Cash Flow”,
Cash flow is the money you receive on a regular basis over the money you invest in an investment. such as interest earned on savings and deposits are cash flow because it provides revenue for you. In property, the rent can be a revenue or cash flow for you. The more buildings you can rent out the greater the cash flow you.
The value of your ownership of the house increases.
The value of your ownership or rights to property investments which are financed from the concept of using other people’s money was going to increase, far exceeding the debt or obligation to you. Ownership by a person in an investment is known as equity. For example if the purchase of your property investment amounted to USD 100 million, which was financed by a bank to Rp 70 million, the remaining USD 30 million to use your own money. So your ownership rights to the investment worth USD 100 million had amounted to USD 30 million or 30% of it. The ownership will increase in value because of the reduced debt repayment obligations. Besides that your property rights are also growing because of rising property values. Your property value will increase due to inflation which makes the price of goods and services has increased, including property. This is not just due to inflation rising property values but also you have the opportunity to increase cash flow or your regular income by increasing rents in line with inflation this house. The increase in property values this can even increase your borrowing power. Banks are usually happy to provide additional loans based on collateral or property price increases.