Real Estate Investment

The Best and Most Profitable Investment in Egypt

July, 2022

    /BLOG/Discover Real Estate

If you are wandering how you can maintain the value of your money during the current inflation surge in Egypt; the answer is: you have to invest your money. By investing your money you are not only able to keep its value but you can also gain more. There are many forms of investment in Egypt such as investing in gold, the stock market, real estate, or buying bank certificates. We will focus on real estate investment in Egypt, its types, benefits, and the principles an investor should consider to ensure a successful real estate investment.

Real Estate Investment in Egypt

Real estate investment is one of the best and most important forms of investment in Egypt. You can invest in real estate by purchasing a property for the purpose of reselling or renting and reaping high financial gains. This kind of investment has been increasing even more during the last few years as the Egyptian government’s recent directions have been focused on building many new cities such as the New Administrative Capital, New Alamein, and El Galala City. This direction has led to an increase in Egyptian investors and businessmen’ keenness to invest in properties in these new areas. It is also considered a strong step towards real estate exporting as foreigners consider investing in those areas as a valuable opportunity, which results in boosting the Egyptian economy in general and the real estate market in particular.

Types of Real Estate Investment

There are many types of real estate investment in Egypt, including:

1- Residential Investment

Residential properties are considered one of the basic needs of any citizen. With the never ending increase in the Egyptian population, there is a constant demand for buying and renting apartments. As a result, residential investment is considered an extremely profitable type of investment. An investor can either buy an apartment then rent it and gain a monthly profit or re-sell it and gain a high ROI.

2- Commercial Investment

Commercial Investment is a type of real estate investment that investors turn to for business-related purposes. Investors can buy a piece of land and use it for any commercial activity such as a shopping mall, store, or warehouse. This type of investment requires large capital from investors to be able to pay the monthly administrative expenses.

3- Administrative or Office Investment

Administrative or office investment is one of the best types of real estate investment in Egypt but it requires a large amount of capital similar to commercial investment. All you need to do is buy a piece of land, construct a building, and divide it into administrative offices to be rented out to entrepreneurs and business owners.

4- Industrial Investment

Industrial investment means building units outside residential areas to be used as factories. This type of investment requires a lower capital compared to residential or commercial investment, however, investors must ensure that the unit adheres to the required safety standards for workers and provides good ventilation and lighting.

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Benefits of Real Estate Investment

Real estate investment in Egypt grants many benefits to investors, including:

• Protection Against Economic Inflation

Real estate investment is an effective tool during the country’s current economic inflation, devaluation of the Egyptian pound against the dollar, and increase in the prices of commodities and services, as a property sustains its value at any time. It is considered the best among the other forms of investment as it is more profitable, does not have a high-risk rate, and protects against inflation. For all those reasons, investors are always keen to invest their money in real estate despite any increase in property prices and market fluctuations.

• A Property’s Value Doesn’t Decrease Over Time

A property’s value will never depreciate instead it is always increasing due to the constant demand for properties especially residential ones, in addition to investors’ continuous interest in real estate investment. An investor buys a property, with time its value increases and by the time he decides to sell his property he will gain double its price. This is exactly what happened in 2016 when the Egyptian pound was devaluated. Investors who owned a property gained more profit by selling or renting it. This situation is repeating itself in 2022.
If you want to know more about the devaluation of the Egyptian pound against the dollar and its impact on the real estate market in 2022, click here.

• Means for Short-Term and Long-Term Profit

Real estate investment provides short and long term profits. You can buy a property and gain short term profits by renting it. Or you can gain long term profits by buying a property, upgrading it and selling it years later.

• Secure Source of Income After Retirement

Investing in real estate is a great way to get a secure income after retiring. It is a successful option for anyone who wants to invest the money they gained over the years to be able to generate a steady income for their future.

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Principles of Real Estate Investment

There are many principles an investor should consider when investing in real estate to ensure a successful investment. Among these principles are:

• Study the real estate market well as it is always undergoing changes and price fluctuations depending on the circumstances the country is going through

• Choose the most suitable investment type such as residential or commercial that will achieve the highest ROI during the current time based on the market’s condition.

• When it comes to residential investment, investigate the residential area where you want to invest in terms of its number of inhabitants, surrounding property prices, and services provided in this area. Choose the area that has a high demand.

• Evaluate the investment and determine its costs. An investor should consider the costs that he will spend on the property such as any administrative and maintenance fees… etc. If an investor will invest his money in an outdated property, then he should calculate all the required renovation costs that will be inquired as all these expenses will be reduced from the net investment profits.

• It is recommended to invest in new cities/projects that are still under construction as unit prices are lower than when the project is complete and demand starts to increase which will lead to an automatic rise in the prices of units. By investing in a unit off-plan you will be able to sell it later at a higher price.

• Consult professional and reputable real estate agents who have the needed experience and market knowledge to guide you in making the most profitable real estate investment. Through their vast expertise they will be able to help you decide on: the best type of real estate investment, the right time to invest, and the top areas that will generate a high ROI. They also help you save your time and effort when it comes to all the long legal procedures.

Real estate investment is considered the safest and most profitable investment in Egypt. If you want to invest your money in properties, contact RE/MAX Egypt by calling 16088. We have many real estate agents who have enough experience in the real estate field and will guide you to a suitable property.