Real estate investors can leverage co-investing to boost their returns in 2022
Many wish the year 2022 were the mega money-making year. Seeing as investments play a critical role in making money, have you decided how you are going to optimize your real estate investments in 2022? This strategy should help.
The world is changing and so are the ways that people adapt to the new era.
Solutions to challenges as experienced by people are what keep the world moving and the adoption of these solutions is what keeps the world moving forward.
Don’t rush into a real estate investment without first reading this point of view on what your strategy should be.
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With a mostly young population, where citizens within the ages of 25 and 44 years make up 23.7% of the population, it seems quite counterproductive to then have a high cost for housing plus a high-interest mortgage system. On top of all that, let us consider the high level of unemployment plus how poor that our minimum wage is.
Truth is, the majority of people in this bracket are unable to afford to invest in property (unless they resort to dubious means – which we don’t advocate for with the heightened need for change in our society).
Does this mean that they should be excluded from the property investment market and/or opportunities? If yes, then how many people would really be buying properties that make up a part of the financial market ratings?
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Bearing this challenge in mind as well as the impact of the pandemic and recession that is statistically rocking the scenes; we are now seeing a lot more collaboration to achieve the goal.
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One of which is known as co-investing, where interested people come together to overcome the challenges against their goal.
With co-investing, the costs, risks and advantages are spread across all participants in the same proportion of their contribution. A similar strategy that is well known might be the Ajo method where ‘members’ use it to save for a later date.
But with co-investing, no one waits their turn to be paid as the monies contributed are agreed on by the cost of the project they are taking on.
Why are many people opting for co-investing?
The primary reason for investing is to increase their income. This also applies to co-investors, who, like most investors, plan to make as much money as they can as soon as they can.
Going into 2022, co-investing should be one of the ways that you are looking to invest in properties.
Here are 3 reasons you should explore this strategy:
- With co-investing, you save time and possibly money invested per time. Where you would have been negotiating for an easy payment plan to cover the cost of the property you are buying, you could be planning how to spread your finances of the same across 2 – 4 different property options.
- Once that is done, you are now eligible to be paid by 2 – 4 properties, instead of just the one you would have bought alone. Your N5m that would have been an initial deposit and all subsequent payments are now equity investments earning you passive income according to their locations.
- And now for the best part – capital & value appreciation rates across properties may differ but add up to make you wealthier cumulatively. Properties even if of the same nature but in areas like VI, Lekki 1, Ikate or Oniru would all appreciate at different rates.
And for a bonus point, as an investor (especially with other responsibilities and interests) one of the assurances you will be looking for is the fact that once you are invested you do not have to do anything more.
With co-investments, you really don’t have to do anything else as the properties are managed by professionals via service fees mostly paid for by the tenants. And all that you can keep looking out for are the reports that will be sent to you intermittently.
**A defining moment in my 2021, was realizing that a few friends had used the free content I was sharing to acquire an average of 3 investment properties that had been their saving grace during the lockdown and the worst parts of the pandemic shutdown. To this effect, I am willing to offer 5 readers of this blog a free investment strategy for 2022. If you want it, with your thoughts on this post in the comment section below or shoot me an email at leratoconsults@gmail.com. This offer is valid till Jan 10, 2022.