Before starting, let's quickly explain the most important factor in investment, which is understanding the relationship between risk and reward.
although the importance of this factor, but is so simple, the greater the return percentage is, the higher risks we expect, and by risk, I mean losing all the investment capital.
So, first, we look for the sector, what is it? some say real estate is the safest and the most profitable sector to invest in, that's correct, but not totally correct.
let's take Turkey as an example, almost every day since 2019 my clients consult me about investing in Turkey real estate and I strongly advise them NOT to.
their argument is that the Turkish real estate developers are writing official documents that guarantee a return of 48% within the next 5 years, but the guarantee is written to the Turkish Lira and NOT the USD.
For example, one of my clients bought an apartment in 2019 for 70.000 USD, and he sent me the 48% guarantee and said ( you call yourself a consultant)? I just smiled and never responded.
because I knew the trick of the Turkish real estate sales teams, they never mention that the purchase always is in Turkish Lira, instead, they marginally mention " it costs you 100.000 USD which equals 650.000 Lira", they give you the impression that the USD is the base currency, while it is the opposite.
My client who bought the apartment for 70k USD in 2019, he bought it for 455.000Lira, because back then the exchange rate was 6.5 Liras for each 1 USD, let's assume that he will collect his 48% today and NOT 2 years from now (when the guarantee invoked).
455.000 Lira ( the invested capital I tried to convince him NOT to invest ) + 48% (the growth of the real estate value ) = 673.000 Lira, and that's fantastic right? NO, it is NOT!, because today the exchange rate is 13.6 Lira for every 1USD!
and this will make the 673.000 Lira equal 49,500 USD, the client who told me( you call yourself a consultant) lost 20.500 USD out of his 70.000USD.
that's about 35% of his capital.
In 2019, I saw this exchange rate coming, and I never ever advised people to move any capital to Turkey, but people never listen, I don't know why do they hire someone who will not take his advice.
if you want to invest your money in real estate I strongly advise you in 2 parts of the world, Switzerland or the United Arab Emirates, these two countries are peaceful countries and stable and the leaders in their take big care of the investors so they keep them selfs out of the political crisis.
the other reason is the return, you guarantee your piece of real estate will only grow in value, and since the exchange rate is stable, you don't have anything to worry about.
also, the rental returns are so high, medium size apartment will easily be rented for an average of 2000USD in Dubai or Abu Dhabi in the UAE, and Lozan, Bern, Geneva in Switzerland.
finally, yes the real estate is so profitable and safe but there are many many details to be taken into considerations before jumping in.
study the opportunities carefully and always consult a specialist, who knows, perhaps he saves 35% loss of your capital.
