An increasing number of office workers and self-employed people want to have a side job to increase their income.
However, it is difficult to check stock price fluctuations and research economic trends in between busy main business.
In that respect, real estate investment does not need to be checked in real time, so isn't it perfect for a side job?Real estate investment, which can be managed slowly over time, is especially popular with office workers and self-employed people who do not have time.
In the case of financial products such as stocks and FX, it takes time and effort to constantly check the market and economic trends, study trading techniques, etc., but real estate investment requires a proper business plan and a management company to manage the property. There is no need to check the information every day and make transactions by entrusting it to you.If you consult with the real estate agent who purchases the property, they will be able to handle your business plan properly.
Compared to stocks and FX, real estate investment has less risk of fluctuating in real time, and if you know the basics properly, anyone can earn regular income without difficulty.
table of contents
- 1 Attractiveness of real estate investment XNUMX: You can secure a stable income
- 2 Attractiveness of real estate investment Part 2 “Easy to start even if you have few assets”
- 3 Attractiveness of Real Estate Investment Part XNUMX: Property management, tenant recruitment, and rent collection can be entrusted to a specialized company.
- 4 Attractiveness of real estate investment #4 “It will replace life insurance in the future”
- 5 Summary
Attractiveness of real estate investment XNUMX: You can secure a stable income
There are 4 big attractions.First of all, the first thing that comes to mind is “possibility of stable income”.Since there are tenants, you can earn a stable income every month in addition to your main business.When negative news comes out, stocks and FX may plunge immediately, but in the case of real estate, there is almost no sudden change in land prices or rent.
It is necessary to pay expenses to the management company and repay the loan, but compared to financial products such as stocks and FX, there is almost no risk of a sudden price drop and a loss of principal, so one day you may suddenly have a large debt. It is a low risk investment.
In addition, it is important to have insurance in case of emergency, as it may be damaged in a disaster.
Attractiveness of real estate investment Part 2 “Easy to start even if you have few assets”
And the second attraction is that it is easy to start even if you have few assets.
Many people think that they need to prepare a huge amount of their own capital to start investing in real estate.
It costs about 1 million yen to build a new apartment, and even if you buy a second-hand apartment, the purchase price is almost 2000 million yen or more.However, there are many office workers who invest in real estate as a side business while working for a company.
How did they get the property?
It may come as a surprise to you, but the answer is that you are an office worker.
The reason why it is not important to have a large amount of own funds to start real estate investment is that if you are an office worker with a regular income, it is easy to get a bank loan.Banks offer loans for real estate investment, and even if you have only a few million yen in your own funds, you can purchase properties worth tens of millions of yen.
For loans targeting salaried workers, the maximum loan limit per person has increased to about 1 million yen.
And among the loans, it is said that it is relatively easy to pass the examination, the loan that the major manufacturer and the bank are affiliated with.
Banks have partnered with major manufacturers to increase their share of loans, and there are cases where the screening process is more lenient than general screenings, and the maximum loan amount can go down to the full amount.
Attractiveness of Real Estate Investment Part XNUMX: Property management, tenant recruitment, and rent collection can be entrusted to a specialized company.
Real estate investment does not end with the purchase.On the contrary, it can be said that it starts after purchasing.
When recruiting tenants, it is necessary to carefully examine whether they are people who will not cause trouble.
Collecting rent arrears is a big burden, and you have to respond immediately to inquiries from tenants.
If we receive a notification that the equipment has broken down, we will check the current situation, contact the contractor, estimate, confirm the construction period, and contact the tenants. There are many things to do to manage real estate, such as remodeling, contacting cleaning companies, and clearing security deposits.If you do all these things yourself, you will not be able to concentrate on your main business, and you will not know why you started investing in real estate.
However, if you can ask the management company to do the work on your behalf, you will have to pay a service fee in addition to the loan.By making good use of management companies, even office workers will be able to invest in real estate.
Related article:How to choose a management company that is important for real estate investment?Points to identify a reliable contractor
Attractiveness of real estate investment #4 “It will replace life insurance in the future”
The fourth attraction of real estate investment is the ability to leave assets in the form of life insurance in the future.
It can be used as a second insurance.Real estate is effective as an asset that you can leave to your family in the unlikely event that you pass away.How can you use your real estate investment as a second insurance policy?
1. If you purchase real estate such as an apartment with a loan, you can take out group credit life insurance.
This means that in the unlikely event that the policyholder dies, the insurance company will guarantee the balance of the loan, and the balance will be repaid to the financial institution.In other words, when you die, you can end your loan repayments with a group credit life insurance and leave your family the apartment where the loan is gone.As long as there are tenants, rent income will come in steadily every month, so the surviving family will be able to earn a stable income.This rental income will be in the form of receiving the insurance money of a normal life insurance as an annuity.
2.Difference from other insurance
Group credit life insurance is different from general savings-type insurance used for individual annuities, etc., and the premiums paid are not directly covered.In contrast to savings-type insurance, which can only receive insurance benefits that are approximately equal to the amount of insurance premiums paid, group credit life insurance pays insurance premiums for the balance of the loan regardless of the insurance premium.Also, if you receive savings-type insurance in monthly installments like an annuity, the accumulated amount will decrease steadily, but if you have finished repaying the loan, the rental income will increase steadily from there. .Unlike the reserve fund, which eventually disappears, as long as there are tenants in the apartment, the income will never run out.
3. Types of group credit life insurance
Group credit life insurance basically guarantees the loan balance in the event of the policyholder's death or severe disability.However, depending on the type, it is possible to extend the coverage even further.In addition to death and severe disability, there are three major diseases, such as cancer, stroke, and myocardial infarction. Seven generations cover hypertension, diabetes, renal failure, and liver cirrhosis. Yatsushiro also includes chronic pancreatitis. There are also products with sickness protection.With conventional group credit life insurance, coverage was not applied in the event of sudden illness, but with the advent of insurance with a wider range of coverage, it has become possible to feel more secure.However, insurance premiums may be added in some way, and the conditions for coverage may differ from the usual ones, so be sure to check carefully when you enroll.
If you take out group credit insurance when purchasing real estate with a loan, your family will be able to earn a stable monthly income like a pension in the future even if something happens to the policyholder.Also, since it is not a savings account, all of the loan balance is guaranteed, so the bereaved family will not owe the loan.As a second insurance, it is nice to be able to effectively leave the apartment to the family.
Summary
- Real estate investment is ideal for side business because it is not necessary to check in real time
- You can earn a stable monthly income in addition to your main job
- If you are a salaried worker or self-employed person, it is easy to start even if you have few assets
- The troublesome property management, tenant recruitment, and rent collection can be entrusted to a specialized company.
- Substitute for life insurance in the future
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
