Real Estate investing is more than profiting from a physical property. There are many ways to invest in real estate. As Muslims, your investment should be sustainable and ethical. Hence, halal real estate is a great option. This article will explore the best halal real estate investment options in 2024.
Real Estate investment is also called property investment, and it involves the purchase of properties in the hopes of making a profit from future sales. Halal real estate investment is different from conventional real estate investment. According to Shariah, the property in question must not be affiliated with impermissible activities. Naturally, real estate embodies the act of halal investment. It’s a tangible option for investors who seek transparent and ethical investment opportunities.
Why Halal Real Estate Investment
The Shariah law aims to promote good governance and social values. Halal real estate investment is a sustainable investment for Muslims and non-Muslims, which upholds social values. Also, it has low volatility compared to other halal investment options like ETFs and stocks. With halal real estate, you can diversify your assets easily; it can act as an inflation hedge and economic scale.
Besides, the Shariah scholars examine halal real estate investments thoroughly to ensure it doesn’t carry out any harmful activities. Another reason to invest in halal real estate is the benefits. Investing in halal property is synonymous with creating a positive impact on society. The investment proceeds are usually used as funding for social developmental projects, which is like offering a helping hand in making the world a better place.
Halal Real Estate Investment Options in 2024
1. Rentals
Rentals are one of the halal real estate investment options in 2024. They are common way of investing in real estate generally. It’s also an option in halal real estate investment. You can rent out your property to become a landlord. As the landlord, you must take responsibility and ensure your dealings with tenants are according to the Shariah law.
You’ll be responsible for property maintenance, Takaful, taxes, rental issues, etc. You’re good if you can handle the responsibilities or, better still, hire a property manager to help with the tasks.
2. Property investment enterprises
Some enterprises help with the investment process. They get resources from different investors and manage the properties. They ensure that the dealings are halal and distribute the profit among the investors.
With this, you can worry less about how to run the property.
3. Islamic Real Estate Investment Trusts
REITs are companies or Trusts that pool resources from investors to purchase, and manage the property according to the Shariah law. The REITs are tradable on the major exchanges, just like ETFs and stocks.
Islamic REITs appoint Sharjah scholars to monitor the dealings. The requirement to be called a REIT includes distributing 90% of taxable profits to shareholders as dividends. These Trusts invest in a couple of properties ranging from healthcare facilities to office buildings, malls, etc. They’re very liquid when compared to other real estate investment options.
4. Direct Investment
Direct Investment involves having complete control over choosing the property. It requires plenty of effort, though, from finding the project to the management. However, your dealings must be Shariah-compliant. This option gives full control over the investment proceeds. However, it’s more demanding and involves property management risks.
Tips for a successful halal real estate investment in 2024.
- Diversify your portfolio across different property investment
- Collaborate with like-minded investors to ensure a more fruitful investment.
- Choose any of the halal Investment Options above and ensure it’s Shariah compliance.
- Follow the current trends in the real estate investment market
- Have a detailed exit strategy that you can use if the investment goes sideways.
Frequently asked questions about Halal Real Estate Investment?
- What’s halal real estate investment?
First, halal investing involves investment activities that are allowed under Islamic principles. Halal Real Estate investments are real estate investments that are permissible in Islam. They usually include buying land and properties that aren’t used for impermissible activities.
- How can I be assured that the real estate investments are halal?
This is why we have Shariah compliance screening. It helps to review the investment thoroughly to ensure that it fully complies with the Shariah principles. The screening is typically done with an auditor or a Shariah board. You can also reach out to Islamic scholars to guide you on the real estate investment to select.
- Which type of halal real estate investment is best for me?
Looking for the best halal real estate investment options in 2024? Don’t fret! This article explores the best halal real Estate investment options in 2024. We’ve compiled a few types of investment that will suit you.
- What type of challenges can I face while investing in halal real estate?
You can face issues like property management and liquidity concerns. However, you can scale through these challenges with the right planning.
- What are the different types of halal real estate investment?
They include Direct Investment, REITs, developmental projects, property investment enterprises, etc.
Bottom line
Halal real estate investment is one of the best investments you can choose as a Muslim. The investment helps you to participate in social and ethical developmental projects. Also, there are several options when it comes to this investment. So, we’ve compiled The best halal real estate investment options in 2024. You can check them out and choose the one that resonates with you.