The actions of men are the best interpreters
of their thoughts – John Locke
Welcome to the season of caring and sharing.
It is a season in which we endeavour to show
love to the people around us by giving them
gifts. Many of us would also receive gifts in
cash and in kind. Most of the gifts we will
receive may not last beyond a few weeks or
months but we will treasure the memory. Yet,
there are more enduring gifts that we can
give ourselves and give to others.
In addition, real estate has great income and
wealth creation potential. You can generate
regular cash flow if you invest in residential
or commercial property rentals. The regular
income that this will generate is an important
aspect of your wealth creation plan. While
enjoying this, the property also will begin to
appreciate in value. This goes with less risk
when you compare it with other investments.
Even in tough times, real estate may reduce
in value but will ultimately go up in value.
Unlike many other investments, its value is
seldom totally wiped out.
One of the most profound pieces of wealth
creation advice ever given has been ‘pay
yourself first.’ In one of the classic books on
wealth creation, entitled, ‘The Richest Man In
Babylon,’ George S. Clason explained the need
to set aside a portion of all that you earn for
yourself. And if you are one of those who have
been following this rule, may I recommend
that you consider using your savings as seed
money for the purpose of buying a piece of
real estate.
Every parent knows the joy of giving their
children a surprise gift that the child will
treasure and every adult can remember the
best gifts they have been given at one time or
the other. As we approach another season of
giving and sharing, I would like to suggest to
you the need to begin to invest in real estate
on your children’s behalf now or at a later
time.
Wise parents invest in things that would give
their children an advantage over their peers
in life. One of such investments most of us
recognise the need to do on their behalf is
that of giving them quality education. We
know that it gives them a good head start in
life and that could make all the difference in
the game of life.
Most famous families that we know, whose
wealth has transcended several generations,
hold a significant portion of their wealth in
real estate. And if you intend to do the same,
then you need to give your children the
knowledge they need to be able to invest in
and manage real estate later in life.
One of the gifts you can give your child this
season is that of a good book on real estate
investment and taking the time to discuss the
key principles that govern this type of
investment. You should carefully explain the
various advantages real estate investment
has over other types of investments such as
its stability and overall possibility of
outperforming other forms of investment
such as stocks due to its general ability to
absorb inflation. It is also limited in supply
and generally will continue to be in demand.
You can begin to invest in real estate on your
child’s behalf by buying a property or
properties in his or her name. A property that
you buy in a child’s name is technically yours
until the child can legally own a property or
you legally transfer the title to the child or
any other person you wish through the use of
instruments such as a Will or Deed of gift.
By law, a minor cannot enter into a legally
binding contract and majority of them also do
not have the resources to acquire properties.
And thus, the title, ownership and possession
often reside in you the parent. This does not,
in any way, limit your right to sell the
property or transfer it to someone else if you
need to.
This is also the usual period when co-
operatives and investment groups attempt to
balance their accounts and reward faithful
subscribers. It is a time when significant
decisions as to the future of such groups are
made. Coincidentally, this is also one of the
best times to buy properties. If you are part
of such a group, you may wish to consider the
possibility of using this year’s income as the
seed capital for real estate investment.
Finally, as we are about closing the last
chapter of this year, it is worth challenging
yourself to apply a few of the real estate
investment principles that we have discussed
in this column. I reckon that it is time to
make this Christmas very special and
memorable not only for yourself, but also for
your loved ones. There is never a better time
than now to do what you should have done
yesterday.
Copyright PUNCH.