Real Estate is the land together with all permanent improvements attached to the land, whether natural or man-made—including water, trees, minerals, buildings, homes, fences, and bridges. Real Estate is a form of real property. It differs from personal property, which are things not permanently attached to the land and can be moved from time to time, such as vehicles, boats, jewellery, furniture, and farm equipment.
Although in most cases investing in Real Estate requires a lot of money it is the ultimate and safest investment option considering what has happened in the past, here in Zimbabwe especially in the period of 2000 to 2009 where inflation eroded most people’s saving. Investing in Real Estate will hedge your investment against inflation. Where inflation is defined as the decline of purchasing power of a given currency over time.
Real Estate as an asset, its value and rentals accrue in tandem with inflation and in most cases at a rate that is higher than the rate of inflation. Property values in Zimbabwe hardly depreciate even if the building on the land depreciates through wear and tear over time. Besides Real Estate earning you a monthly income in terms of rentals, it also does appreciate in value over a period of time and with a good investment, you can actually get a profit when it is time to sell.
Real Estate is a physical asset unlike other investments, which you can actually walk on the ground of your property and you can also inspect the improvements (buildings). Land is generally indestructible and the improvements on it have a long economic life thus it is a real asset with long term returns on investment.
Unlike other investments, another unique advantage that Real Estate has over other investments is the ability for its owner to control it. In essence, in Real Estate the owner is heavily involved in the management of their investment either personally or through an estate agent, that is the collection of rentals and the general upkeep or maintenance of the building.
And in Real Estate if buildings are kept in a good state of maintenance and repair they preserve and appreciate in value. If you are the owner (Landlord) you have the ability to manipulate rentals based on the changing market conditions at that time in order to maximise on the income and to hedge against inflation one of the best advantages of Real Estate investments is that every property is unique it, therefore, means that information on one transaction does not provide an exact proxy for the likely selling price of another property.
Thus the actual selling price of a property is determined by negotiations between the seller and buyer. Real Estate is a safe way of storing and creating wealth.
Last but not least it offers access to finance as it can be used as collateral security when you want to get loans from financial institutions.