Investments in real estate, stocks, bonds, mutual funds are potentially effective financial instruments that, in the right hands, can become a source of passive income.
However, the level of nominal and real profitability, as well as the reliability and prospects of different investment areas are different. How to find those investments that meet expectations, payback period, financial capabilities?
Important! Without exception, all investments involve risk - the probability of losing all the money, zero or negative profitability. Lack of experience and knowledge increases these negative probabilities. Study the market, pay attention to risk management and use only free capital for investments. Be extremely wary of over-the-market offers that are too attractive.
Investing in real estate: things to keep in mind
Investments in real estate, especially in times of crisis, are in high demand - people want to exchange money for reliable purchases. And apartments or houses look in this context as a relatively "safe" investment.
However, it is worth considering the disadvantages of investing in square footage, residential or commercial. Firstly, it is the need to immediately pay a large amount, even if it comes to buying a property under construction. In this case, a loan or a mortgage can lead to a "negative" for many years.
Secondly, there are always risks of cooperation with unscrupulous developers, who either delay the delivery of objects, or do not hand over them at all. In this case, your attachments are “frozen” or disappear. And the earlier the stage of acquiring an object, the higher the risks for the investor.
Thirdly, not all real estate is promising from a market point of view. The budget segment may suffer from falling incomes of the population, the elite segment or commercial real estate are quite specific areas, the choice of an object in which requires in-depth knowledge of the market. Some apartments are simply not listed because of a poor area, undeveloped infrastructure, scandalous neighbors, and so on.
Not all apartments will go up in price or even keep the initial level of cost, taking into account inflation. Renting out an object is also an ambiguous way to generate income, since a lot depends on the competitive qualities of the object and tenants.
Buying primary and even more secondary real estate is an area in which fraudsters are actively involved. Pay special attention to the verification of objects and developers, as well as the legal purity of the transaction.
Alternative solutions
Bank deposits are not the only ones worth mentioning as alternative investment solutions capable of preserving or even increasing capital.
Banking organizations offer their clients the purchase of a variety of investment bonds, whose yield depends on specific factors, investments in mutual funds or government OFZs for the population.
More risky options that require the investor's experience and knowledge are to independently purchase currencies or stocks that look promising and safe for the chosen investment horizon.
