This article was published on delfi.lt
Investing is one of the most popular ways to earn profits and grow capital. Nowadays, there is no shortage of financial instruments and options for investing money, but often only long-term investments are made, which some investors believe are not up to their expectations. Deividas Urbanovičius, Head of Investor Relations at buy-to-let investment platform InRento, says that investing should be a balanced process, where the rewards are not just 20 years or more away, but a month later.
Ongoing financial benefits
D. According to Urbanovičius, investing should not only provide financial but also emotional benefits.
"When it comes to long-term investments, such as pensions or index funds, we often hear about the benefits of investing for a lifetime and how it will give us a dignified old age. There is nothing wrong with that, but investing should not just be about changing numbers on a screen; people should reap the financial benefits as soon as possible. This is why both Lithuanians and a large part of Europeans choose to invest in real estate projects - they buy properties and start renting them out," says Urbanovičius.
As we know, not everyone can afford to have several apartments for rent. It is also rare that anyone has the desire to take care of the rental administration, so people are increasingly choosing the modern alternative of investing in real estate rental projects, where interest is paid to those who invest.
"When investing in buy-to-let projects, interest is paid to the investors every month, similar to the way tenants pay rent. In many cases, however, when investing in funds, real returns can only be expected after a few years, which is perfectly acceptable to some investors", explains the financial expert.
Emotional background
According to the correspondent, such an investment model, where interest is paid on a monthly basis, not only increases confidence in investing as a great way to earn extra money, but also motivates people to take an additional interest in investing and to deepen their knowledge of this field. Such factors contribute to a higher level of financial literacy in society.
"Some people are frustrated with pension funds that do not allow them to dispose of their own money at will. However, when the interest is received periodically, it is much easier psychologically," says InRento's Head of Investor Relations.
Emotional state and a sense of security are very important factors when investing, so investing in shares, although another way to make money now, is far from suitable for everyone, he says.
"When I invest in shares, one day I see my investment portfolio go up, the next day it goes down.
Getting used to big changes is not easy for everyone, because the risk of volatility in value is high," says Urbanovičius.
Clear and simple
Understanding the principle of investing - how money is made - is crucial, says the financial expert.
"If you ask someone who invests in index funds how their investment generates a return, you probably won't get a very detailed answer. But if you ask someone who invests in buy-to-let projects the same question, the answer would be simple: the housing is financed, managed and the rental income pays monthly interest to investors.
"We currently have more than 21,000 registered users on the platform from all over Europe, of which almost 3,000 are active investors. We pay them more than €130,000 in interest every month. Again, this is not just changing numbers on a screen, but a real return that can be used to buy something or reinvest it," he says.
A clear and simple investment model has allowed us - InRento - to finance over 150 projects for more than 25 million euros in the 3.5 years since its launch. Even more impressive is the fact that not a single payment has been delayed in all this time, the average annual return on investment exceeds 11%, and an average of 160 investors from different European countries invest in a single buy-to-let project.
"We are pleased that our investor community is mature, educated and, most importantly, investing on the basis of a stable strategy," says the Head of Investor Relations at InRento
