You would agree that the real estate business is a lucrative business. Even most people found the property business (buying and selling land, house and shop) is relatively easy compared to other businesses. However, practice in the field was not that easy.
Many investors are already investing in property but do not earn profits even losses due to the location of the property is not strategic, got evicted widening roads / other public facilities or because of legality (the letters land is not clear).
Many investors are the losers in the property because they were not investors. They are speculators who buy property. They bought the property in the hope the price will go up 6-12 months. They are often less careful in analyzing the condition, location, and the legality of the purchased property.
Indeed, the real estate business is very profitable at all when we are no longer a property speculator. Therefore, we must be experts in the field of property. Most of the business property / real estate are the ones who are experts in this property. They do not buy the property, land and buildings on the basis of speculation. They bought the property because the price is below market, strategic location, good prospects for the future and believed to be no problem legally.
Property Franchise vs Business / Franchise
We believe this property business more profitable and safer than a franchise business / franchise. If investors can not choose franchisees that are tested, then the chance to go broke in a huge franchise. Moreover, today many franchisees ‘imitation’ which in fact they do not deserve to be called franchisees for not fulfilling the requirements as a franchisee. As he was still new, not yet profitable business, yet has a good system and the brand has not been widely recognized by consumers.
With a franchise business, the majority of investors’ money will be used to purchase the investment costs such as business equipment, rental shop, to business operations. Thus, when the franchise was not running, then investors automatically lose and the money is not going back out alias.
For a successful franchise business, investors should not sit back and rely on franchisees. Investors should be involved actively take care of business. In addition, the franchise or other business typically internal rate of return can reach 3-5 years.
Now compare with the real estate business. Investors’ money will used to purchase property such as land, buildings and shop houses, plus a small part to renovate. Other costs or operating costs are very small. Possible losses in this business is very small because of investors’ money would come back a minimum of capital from the sale of the property back. And chances are very rare because usually the price of land and buildings are always going up every year.
Business benefits of better properties than the usual business or franchise business. The business also will not take time investor, because it will not engage in daily activities, day to day operations.