The recent years that the world has lived have been full of political, economic and health events. The beginning was with the outbreak of the Arab Spring revolutions, the turmoil of which continued for several years in some countries. The world had barely stabilized until the crisis of the spread of the Corona virus prolonged and turned into a pandemic, starting a comprehensive closure and governments implementing health measures that left economic effects. It is difficult to ignore inflation, economic slowdown, and contraction in the volume of mutual trade. As usual, capital tends to grow in stable regions far from turmoil.
In such circumstances, investors prefer either to keep their money in valuable assets, bonds, and wealth that are not affected by time and political and economic conditions, most notably precious metals, or to develop it in activities that are far from conditions of recession and inflation, such as real estate of all kinds, building lands, and agriculture.
Great Confidence in the Property as an Asset and a Keeper of the Value of Money
Real estate has global confidence in the Arab world as a store of value and a commodity with increasing demand, especially in our countries in the Gulf and the Middle East, where the population and expatriates are constantly increasing. There is no fear of the so-called real estate bubble because the demand for residential and commercial real estate is high and is expected to rise further in Saudi Arabia as a result of implementing comprehensive development in the economy. According to the 2030 vision of the Kingdom.
Different Types of Real Estate Investment
Speaking of real estate investment, it has various forms that are not limited only to simple methods of buying several properties and renting them to individuals or institutions, or selling these properties after years at a profit. There are other methods that are more professional, organized, and managed with high expertise and do not cost you the trouble and effort of follow-up, and that is through real estate funds (REITs) and development financing. Through Vision 2023, the Kingdom seeks to increase its real estate wealth, in cooperation with major companies as well as individuals, with the aim of providing a distinctive residence or property to the Saudi citizen, as well as involving the citizen in profitable investment activities with a good return.
Mutual Funds in Saudi Arabia
Among the forms of real estate investment are what are known as mutual real estate investment funds. Real Estate Funds are considered a form of investments in mutual funds or so-called Mutual Funds. They are a joint investment partnership managed by a group of specialists. The most important characteristic of them is the low cost of investment and therefore the risk in it is not high.
Real Estate Investment Fund is a form of joint investment that focuses on one type of investment, which is real estate. Its owners may invest in regular commercial or residential properties, or in a REIT investment fund.
Difference between Mutual Funds and Real Estate Funds
- Investing in mutual real estate funds where the investment is made indirectly in the purchase of real estate.
- Mutual fund profits depend on market price fluctuations and asset value increases.
- REITs pay dividends quickly while mutual funds require some time.
Profitable Return on Investment
ROI on mutual funds, which is considered the most important goal and measure for any investment, requires some patience from investors and not for those who want quick and periodic returns.
As we said, it depends on the increase in the value of assets and their rise in value, which requires more time to reap good fruits.
The Most Important Investment Decision Requires Specialists
Because buying a property for investment is still the largest and most important economic and financial decision in the lives of many, it is preferable to seek the help of experts and people with knowledge of the Saudi market and areas with high demand in the Kingdom or that guarantee a good future for your investments, which means entrusting the matter to an economic advisor who will advise you on the type that is best for your budget and circumstances. Aqarmap offers its extensive experience gained during more than a decade working in various Arab real estate markets. The goal is to know more before choosing this or that investment.