Investing in construction: disadvantages, advantages, distinctive features

Investing in construction: disadvantages, advantages, distinctive features

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All types of real estate investments can be divided into several very large groups, each of which will differ from the rest in its unique and exceptional features that are unique to this type of investment.

Like real estate itself, all private investments in it are divided into:

  • investment in construction;
  • in commercial real estate;
  • investment in residential real estate;
  • into land plots.

Pros and cons

Each of these types of investments has its own merits, advantages and disadvantages. For example, investing in already built residential premises is a very versatile choice in terms of getting some benefit from it: you can rent an apartment, sell it at a better price, or use it for your own purposes, for example, to live in it.

The investment of one's money capital in real estate under construction at the very beginning of its construction is usually carried out with the aim of its subsequent resale a few years after the completion of construction as such.

The giant advantage of such an investment will be the fact that it is one of the easiest of all existing ways to invest your money in real estate. All that is required for this is to sign the papers, and after a few years to sign the papers one more time - and that's it. There is no need to search for tenants and fitters, collect rent from tenants, and so on.

Real estate that is acquired in this way is distinguished by a much lower price than that bought in an already “ready” form. In addition to all this, the contractor can give a discount when buying for various factors such as volume.

Unfortunately, the biggest and even fatal disadvantage of this type of investment is the very high risk of losing all your capital. Construction sometimes drags on for several years, in the process a construction company can easily go bankrupt, money can be stolen. Such risks must be taken into account when making investments in construction, and indeed when making any investments.

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