Why is it that I like investing in properties?
It’s because of something that I call “Productive Value”.
A property that I have invested in can be put
into productive use to help me generate income and cash flow while I wait for
it to appreciate in value over time. For example, I am able to rent out the
property to tenants or even use it as a business premises.
Alternative forms of property investments such as
REITs can also provide me productive value through dividends while giving time
to the REIT manager to grow their stock value through asset acquisitions or
enhancements.
Investment in precious metals (eg gold and
platinum) can certainly yield very good capital appreciation when it’s on the
uptrend. However, I won’t be able to put the gold I own into any productive use
while waiting for the prices to increase!
Therefore, one should always consider productive value when it comes to property investments. I have said before that I do not encourage investment in uncompleted property, as I cannot earn any income from it while waiting for its completion. Moreover, developers tend to price new launches based on future values. It has no productive value to me for a few years and I am would end up paying a premium for it!
Therefore, one should always consider productive value when it comes to property investments. I have said before that I do not encourage investment in uncompleted property, as I cannot earn any income from it while waiting for its completion. Moreover, developers tend to price new launches based on future values. It has no productive value to me for a few years and I am would end up paying a premium for it!
Till the next post,
Wien
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