This has affected the investment rate in the industry as potential investors shy away from the industry due to high-risk ratings. Despite these challenges, investing in the construction industry can be a rewarding experience for those who it right. Here are five ways that you can earn more from the construction industry by doing less.
1. Opt for Rental Property
Demand for rental space continues to increase as the population increases. This is particularly the case in most urban areas across the globe as more people migrate from rural areas for business and work opportunities. Investing in rental property can provide investors with consistent cash flow, even as the value of their property increases with time.
2. Invest in Real Estate Mutual Funds (REMFs)
Real Estate Mutual Funds are great investments that consist of securities, including stocks in real estate companies. Most mutual funds are invested in commercial and corporate properties that feature residential complexes and agricultural land. REMFs are flexible and do not limit your growth as an investor. They have high liquidity, which means investors can convert them into cash with ease whenever they need to. Better still, REMFs can use Real Estate Investment Trust (REITs) to invest in properties directly or indirectly.
3. Go for Pre- Construction Properties
In this kind of investment, investors in the construction industry buy ‘options’ on properties before the ground is broken. Pre-construction properties are among the fastest growing real estate investments that offer investors quick returns. Pre-construction condominiums are some of the hottest pieces of real estate on the market today. Investing in such properties is a smart decision because the initial prices tend to be low. This puts investors in a position to make considerably high returns on their investment.
Investors also have the option of holding on to a property for a while after construction works have been completed. This allows them to rent the property out, which earns them a monthly income off their investment. However, this depends on the terms of the pre-construction contract. Additionally, if an investor opts to ultimately sell the property at the end of the contractual term, they earn extra returns on their investment because the property market will have appreciated in value.
4. Invest in Resale property
This investment involves purchasing used properties and reselling them at a profit. Since the value of real estate properties appreciates with time, property resale is a worthy investment because it saves you the time and cost of construction. The main advantage of this kind of investment is that you purchase a property at a lower cost and hold onto it until its value goes up. This does not mean buying any used buildings available in the market. There is a criterion for identifying the property to buy and which one not to buy so as to maximize the return on investment.
For instance, old properties come with renovation costs. Before you purchase a resale property, consider hiring Melbourne Your Building Inspections to help you inspect the property that you have identified. Seeking inspection services and advice from professionals enables you to determine whether a property is worth purchasing or not. Upon inspection, you will also be able to establish the damage on the property and the cost of renovation. In the event it is established that the property is viable, the inspection report will help you determine the estimated resale value of the property.
5. Invest in Technology
In today’s digital world, business and technology go hand in hand. As a matter of fact, the efficiency in business is driven by technology because of the high accuracy levels that it is capable of achieving. As such, investing in technology that transforms the construction industry can be rewarding. In the construction industry, technology helps eliminate human error. The industry is constantly embracing new technological innovations that can facilitate its growth. For instance, the use of drones is now helping with the supervision and inspection of construction projects.
This means that construction firms are able to maximize productivity and enhance security, which has led to a significant reduction of equipment loss due to theft. At the same time, the adoption of mobile construction is helping field staff with data collection and facilitating easy access of data through cloud technology. Prefabrication and modular construction are cutting construction time by up to 50%. This translates to more productivity and reduces the cost of production significantly.