Unlike stocks or bonds, which are susceptible to volatility, real estate is a smarter choice because it appreciates over time and offers more stability. More millennial CEOs are tilting towards investing in real estate and building a rich real estate portfolio. They reshape the market by approaching it with an innovative and technology-driven mind. This can be seen by their attempt to mix up-to-date strategies with values from their generation and their focus on sustainability.
Millennial CEOs approach property investment by monitoring market trends, crowdfunding, and co-investing with like-minded individuals to revitalize urban areas and turn neglected spaces into modern facilities.
Why Real Estate? Benefits for Millennial CEOs
Millennial CEOs are investing in properties for many reasons.
Real Estate Portfolio Diversification
Real estate portfolio diversification is vital because it ensures that if something were to happen to your other investments, there would still be properties to rely on.
CEOs are known to sometimes have several business ventures and investments. These investments, such as stocks, bonds, cryptocurrencies, or tech startups, are very volatile and pose serious financial risks.
However, investing in real estate provides stability and profitability. Diversifying reduces financial risk, lowers volatility, and provides a consistent and higher return on investment (RoI).
Long-Term Appreciation
Many investors build wealth by appreciating or increasing the value of a property. Unlike other types of investments easily influenced by market trends, real estate appreciates over time.
The ability of a property to triple in value over time is why millennial CEOs are drawn to owning properties. Rental income and sale of property are two sources of profit in real estate, and when a property appreciates, it impacts rent and profit for the sale of a property.
Inflation is your best advantage as an investor. Inflation adds value to your property, and with a good property, investors can make money as the value of the property rises.
Wealth Building
Building a real estate portfolio is one of the best ways to build long-term wealth. The earlier you start investing in properties, the sooner you start building wealth.
Investing helps build wealth because the market is less volatile than the stock market. CEOs can achieve successful wealth building through income from rents and profit from sales.
Wealth-building also drives millennial CEOs to own properties. They believe in securing future financial stability for their families and that property is an asset that can be passed to future generations.
Real estate can generate passive income such as rents and Real Estate Investment Trust (REIT), contributing to financial freedom. Renting out properties can provide a consistent cash flow and complement other sources of income. Also, investing in REITs provides passive income without having to directly own properties through the payment of dividends.
Millennial CEOs are also keen on leaving a positive legacy, and they do this by investing in underdeveloped communities and providing affordable housing.
Crafting Your Investment Strategy
To build a good real estate portfolio by investing in Dubai premium properties, you must have clear investment objectives and craft investment strategies to meet these objectives.
There are different goals for investing. Some of these may include building long-term wealth or accumulating short-term rental income. To achieve these goals, use any of the following strategies:
- Purchasing and renting out residential properties to get consistent rental income.
- Investing in commercial properties big enough to cater to the business needs of other people. For example, a building big enough for a mall can rent retail space to other business owners.
- Purchasing off-plan properties at pre-construction prices and selling them at double the purchase price after completion.
Meeting these goals can come with risks, and to mitigate them, you can do the following:
- Conduct due diligence before committing to the property.
- Manage market fluctuations by using hedging strategies such as investing in REITs.
- Get insurance to protect against unforeseen damages and disasters.
Financing Your Real Estate Ventures
Having adequate funding is important before venturing into real estate. Aside from personal funding, millennial CEOs can also finance owning properties through the following channels:
Mortgage
Dubai offers foreign investors two types of mortgages such as variable-rate mortgages and fixed-rate mortgages. These mortgages make it easier for millennial CEOs looking to build a portfolio and invest.
Alternative Financing Methods
Other than personal financing, funding can also be obtained from other avenues, such as partnering with like-minded individuals or developers to pool resources and share risks and profits.
Professional Networking
While building a portfolio, it is advisable to build a professional network. This affords you access to financial opportunities and alliances in situations where you have insufficient funding to purchase a property.
Maximizing Returns and Mitigating Risks
In order to reduce risks and increase the return on investment, there are certain steps that can be taken, such as:
- Appointing proper property managers to manage tenants, collect rents, maintain and repair properties, and reduce vacant possession.
- Increase property value through renovation and expansion
In an effort to maximize returns and mitigate risks, have an exit strategy. Your exit plan can be to cash out by selling the property for business, refinancing your mortgage or even doing a 1013 exchange to avoid capital gains tax.
Real Estate – A Cornerstone of Millennial CEO Success
Real estate is not just an investment; it is a path to financial independence, wealth creation, and legacy building. Millennial CEOs can ensure their place as innovative and successful leaders by implementing strategies for building a successful portfolio. Start building your portfolio today to secure a brighter and financially comfortable future.
Image Credits: Photos by Bailey Anselme and ZQ Lee; Unsplash
