The use of consortia for financial leverage is increasing

Find out how a real estate consortium can be the key to diversifying investments and increasing assets in an intelligent and safe way

The Consortium System closed the 1st quarter of 2024 highlighting a growing trend. Based on the increase observed in the average ticket, in the months of January, February and March, deals reached a cumulative amount of R$77.24 billion, 12% more than the R$68.95 billion recorded in the same period of 2023. According to data from the Brazilian Association of Consortium Administrators (Abac), last year alone, R$316 billion was released through this market, which currently has more than 10.46 million active participants.

In a financial world full of options for multiplying resources, the consortium appears as an alternative for those seeking not only to acquire assets, but also as a way to diversify investments. Differentiating themselves from other types of financing and investment, consortia offer a unique strategy to achieve short, medium and long-term objectives, both by purchasing goods and contracting services. This collaborative method not only facilitates access to a variety of assets, but also positions itself as a financial planning tool that encourages discipline and thrift, while promoting a culture of smart investing among its participants.

For Alexandre Laudimiro, commercial director of Activate, a consortium platform specializing in investments, this growth can be attributed to the fact that investors have realized that this financial modality allows them to exploit assets without decapitalizing and therefore expand their assets and investments in a sustainable way, unlike financing, in which interest is charged annually, the consortium fees are defined based on the contractual period. In other words, if an investor purchased an asset in a consortium and agreed to pay the amount with interest (administrative costs) of 22%, in 220 months he will pay the equivalent of 1.2% per annum.

“There is no competition between one modality and another because they are designed for different scenarios. The consortium uses simple interest and the financing uses compound interest. The highest rate in the consortium is still lower than the lowest rate in financing. Consumer behavior has evolved greatly and, today, knows that financial planning must be part of its wealth management. This is why the consortium has increasingly become an option for those who wish to exploit wealth for their economic advantages”, explains the director of Ativa Commerciale.

Leverage is a financial strategy that involves the use of own and third-party resources to expand investments and increase return potential, thus allowing you to multiply your earnings. Before discussing the benefits of leverage with a real estate consortium, it is important to understand the main leverage models used in the financial market:

Financial leverage: In this model, leverage involves using third-party resources, such as loans and financing, to finance part of the company’s operations. Leverage allows you to expand investments and increase profits, but it also increases possible debt problems, thus requiring financial planning.

Investment leverage: It consists of using one’s own and third-party resources to make investments with the aim of obtaining financial returns higher than capital costs. This method can be applied to different types of assets, such as real estate, shares, bonds and investment funds.

Equity leverage: It involves using financial resources to acquire assets that generate income and/or appreciation over time, contributing to an increase in net worth, as well as generating passive income. This strategy is commonly used to invest in long-term assets, such as real estate.

Operating influence: Focused on using resources and operational strategies to increase a company’s efficiency and profitability. This can include optimizing processes, reducing costs, expanding production capacity and improving the quality of products and services.

The founder of Activate the ConsortiaIt also highlights that investment diversification and financial leverage with real estate consortia offer a series of advantages such as effective financial planning, solid profitability, low costs, absence of interest, flexibility in payments and low investment risk.

For more information simply access: @ativaconsorcios

Website: https://ativa.com.vc

Source: Terra

Rose

Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.