Not keen on working every day to support yourself? If so, maybe you should think about real estate. If they don’t work every day, how do real estate annuitants make money then?

The real estate annuitant

The activity of the real estate annuitant merely means investing in real estate and watching over such investments. The real estate asset can be a dwelling (apartment or house), an apartment building, a commercial building, a store, a land or even an agricultural land. The real estate annuitant signs with a tenant or operator, a rental lease or an occupancy agreement- a contract which defines the terms and conditions related to the occupation or operation of the land.

Real estate annuity

Also called “land annuity”, the real estate annuity is simply the income that an owner or holder of a real estate asset receives in return for its exploitation by a third party. So this is the income from real estate. The real estate annuity is collected periodically. It may be paid daily, weekly, monthly or paid annually.

The advantages of being a real estate annuitant

The real estate annuity is a profitable source of income. In other words, it is :

flexible enough :

The real estate annuity is an excellent passive income when it is well exploited. The owner of a real estate asset has the freedom to go about other occupations without worrying. This ease is even more evident if the annuitant entrusts its management to a real estate agency.

A considerable additional income :

Depending on the property, the rent collected can largely supplement a household’s income or even be its main component. The business climate, the economic context and the value of the asset are among others, the elements which enter into account in the estimation of the annuity. Thus, a building rented out in a highly prised commercial area would be excellent as an additional source of income.

Can improve retirement :

A homeowner who is a low-income worker has more or less enough asset to secure his retirement years despite the low income he gets from his job.

Allows the annuitant to expand their real estate assets :

Thanks to the land rent, the owner has the possibility to acquire other real estate or to improve the attractiveness of what he has as property. It then increases the value of the annuity.

Mistakes to avoid as a real estate annuitant

To maximize the profitability of real estate investment, avoid, among other things:

Getting started without prior preparation :

Real estate may be a great source of income, but in everything, failing to plan is planning to fail. The future real estate annuitant is about to get into a sector where he will interact with several people each playing an important role in his activity. They must therefore learn to know more about everything related to real estate: from the purchasing power of potential tenants, for example, to details related to taxation.

Choosing the location of your future property according to your tastes only :

If you want to invest in rental property, you must choose the location of your property carefully. Make sure that the area and even the city in which you want to invest has good economic momentum in the long run. Is the creation of new employment zones possible in the region? Is there or are there plans to build infrastructure in the area? these are questions you should ask yourself before acting.

Setting an annuity which is too costly :

It is quite normal for the real estate annuitant to seek to expand their property in order to increase the rent. But be careful not to have the opposite effect by being too greedy. If you charge a much higher rent than that offered by competitors for the same type of property, you risk losing your customers instead. A high rate of rental vacations would not be to your credit at all.

Trivializing the maintenance of your real estate assets :

It would be an illusion for the real estate annuitant to seek saving money by avoiding to spend money for the maintenance of their property. You must make sure that you make the necessary repairs at all costs. The permanent attractiveness of your property will justify the value of the annuity you receive.

Thinking that you will be rich immediately :

Real estate investment makes the word “investment” meaningful because you will only really benefit from it in the long term. You will need more than ideas to take advantage of the real estate annuity. You must be patient and persevering to reap the rewards of your efforts.

Remember that real estate investing is a long-term project and take it into account from the start. It is always safer to call in specialists.

 

Faliratou OROU DAMA