We often hear the Rich and Famous talk about making tons of money, about becoming Millionaire’s and Billionaire’s or having investments to feed their Lifestyle.
Making tons of money is never about just earning in every way. It’s more about how you can save most of it off-course after taking out all expenses. There are always few points to keep in mind if you need to gain the Financial Freedom.
1. Save most of what you make. How? by Investing it somewhere.
2 Invest it anywhere, where it can multiply. That’s how you make the Money work for you.
3. Where do you Invest it? Real Estate. There are many avenues to it. Let’s Dive Deeper there.
Real Estate in any country is the best option. Why? Because the value of Real Estate mostly stays stable if it’s not going UP. Which means your investment will always stay safe? Yes, you have to study the market, understand which country is going to help you help your Money work for YOU.
Real Estate is broken down into a few sections. LAND, LANd, LAnd, Land, land. Commercial, Residential & Shops. Yea I know I stressed on LAND too much No? Why do you think that is?
LAND prices are always going up. LAND is the cheapest before it actually gets VALUE. How? Let’s take an example.
2002 – 2003 Dubai, UAE. There was no much freehold. Many Locals preferred buying Land, cos it was cheap while many investors decided otherwise. Result – Land was very cheap so many Arab Locals got land very cheap. Then the Freehold Law was passed, where Expatriates and Foreigners could OWN properties in Dubai, UAE. The place where Arab Locals purchased Land now came to be a Project, from a Project it came to be a place that would house the Landmark Tower in the whole of UAE and the WORLD, now known as BURJ KHALIFA – The Tallest Tower in the WORLD. So, you see from the Cheapest piece of LAND cos there was nothing to the most expensive once the location became FAMOUS.
Now I know may investors will ask but Land prices did fall when the market crashed back in 2009-2010. Yes, they did, but the smart ones did 1 of 2 things (HOLD or JV) the ones who did the first – Benefited from selling later when the market got back up. The ones who decided to go with the latter, made way more money than they did before.
A JV also known as a Joint Venture, is a process where YOU as an owner of the LAND signs a contract with a DEVELOPER or CONSTRUCTION company to build a Tower as per rules and regulations by the Land Department and Sell individual Units and make profit that will be shared between the two of you. So how does this work. Here’s how –
- Choose a development (Full Commercial, Full Residential or Mix Use) as mentioned in the original Title deed by the Land Department
- Choose a Partner (Reputed Developer, New Developer who wants to enter the market or a Construction Company)
- Set terms and conditions, Profit share & Capital Investment.
There are 2 ways to do this either, you just have your land and he spends the money to construct the Tower, in which case it is a 50/50 Split (make sure you be explicit bout the Profit Share) OR you use your Land and you spend money to construct where you just give a contract to a Construction Company and Pay them the charges to Build the Tower. Now, here’s why the latter option is not really feasible, because you don’t have the money to spend to construct the TOWER. Hence, the Term JV. Unless, you have spare money to construct. and get it ready and sell.
A JV is always better because it helps you make your initial investment grow huge by making individual units on your land and selling. Now I understand that a Land to build tower needs a lot of money, YES. But there are always developments where a Master Developer is making villas and townhouses and is also selling small parcels of Land to make your own Villa or Townhouse. These are small, cheaper because you are buying from the Master Developer at Launch and you can always get the Master Developer custom build as per your design and once its ready you sell it for a premium. You see every Villa or Town House on the block will look alike EXCEPT Yours, that makes it UNIQUE and One of a Kind, creating a demand for a BUYOUT.
So, what things you can do in terms of Land?
Residential Units are easy to buy on Payment Plan from the Developer on a Payment Plan. So, you are not paying all the money upfront. This gives you time to pay in small instalments. Once the Units are ready 2 or 3 or 4 or 5 years later, you can sell at that years current price, which will always be higher cos when you Purchased it, it was just a piece of Land, after the years it took for completion, the whole neighbourhood, project or Master development is ready, which means the Greenery, Parks, Amenities, Roads, Supermarkets and everything you need in a Development is ready making the price appreciate.
Now again you have 2 options. Sell or Rent. If you sell at a premium you make the money quickly once the SALE process is done or you RENT it for a price for any amount of years you like and when you feel you have Made the Apartment work for you enough, you can still sell it and make the entire amount. CAUTION: Make sure you sell it before it gets too old. Make sure you sell when there is Demand.
The same goes for Commercial Offices
Shops however are a little Different cos they fetch a higher price due to its commercial value created by Location, Visibility and Size. CAUTION: Make sure you purchase something that is a Busy Road facing, Big Facade for Branding and a Decent Size that should either fit a Restaurant or a Bank or a ATM or a Supermarket. These are all the ones that will never die out.
When you invest in SHOPS make sure it’s meant for FOOD. Whether its Recession, Pandemic or a Terrorist attack, always remember FOOD will always be in DEMAND. There is no business-like FOOD there will always be someone who wants to open a Restaurant, a Cafe or a Supermarket.
Here is where I would like to conclude today’s topic.
- Invest wisely.
- Every Penny Saved is a Penny Earned.
It’s never about how much you Earn, it’s about how much you save. Because what you save, is what you can invest and what you Invest is what will EARN for you, so you don’t have to work in future.
Once you stop working, you can take up the hobby or interest you gave up to start earning for your family.
By Kevin Vast
Off Plan Property Advisor
Call & WhatsApp: +971 52 241 2384