Investing in real estate is a decision that requires careful consideration. When acquiring a property, you not only decide on the property itself, but also on an urban planning, a town or city, a lifestyle, a business model and much more.
To make a good investment you have to take the time that is necessary. You have to evaluate several options before making a decision and weigh all the variables. That is why today we share these basic recommendations if you want to start investing in real estate.
There are all types of properties: residential, offices, commercial premises, warehouses, tourist. There are many options, it is a matter that you evaluate in which you are going to invest your capital.
Residential properties may be easier to remodel to increase its value and rent than commercial premises or offices; that surely respond to strict condominium standards.
However, the lease of premises for commercial or industrial uses can generate a higher profitability than a residence for residential use.
You must analyze what best suits your budget and your need to receive a return on investment. And, of course, do not rush or stay with the first property you visit.
The first thing to consider is that properties can have a slower and low percentage return on investment compared to other types of investments. The difference lies in the high protection value offered by the assets, compared to the risk offered by other investments that are percentagewise more profitable.
Therefore, you must realize that investing in real estate is a decision for the long term and only in some cases for the medium term. Only then will you see the true profitability of the business.
The revaluation of a property takes time. It depends on the economic situation of each country, as well as the improvements that are made in the property.
Remember that properties take an average of six to eight months to sell. Many consultants and experts in the real estate area recommend considering the sale of the property after at least two years of its purchase.
The mortgage loan from most financial institutions can cover you between 80% and 90% of the value of the houses, with long terms and low interest rates.
Of course, when requesting financing, the general conditions that each bank applies, as well as those that each country lives, prevail. The best option is to acquire a property that you can easily buy, to rent or rent while you decide to sell. This in order to obtain an additional fixed income while paying off the financing received.
You can also opt for financing options to make the improvements a property needs to increase its value.
Buying a property of average value and selling it after five years can be a good deal. However, it is a better decision to decide on properties that are part of projects designed with amenities or comforts for residents, as they are extras that add value to the property.
High-end properties are a more complex investment, as more capital is required first and may take longer to sell due to their high real estate market value. However, they are properties that can generate a higher return whether they are rented or sold.
When investing in real estate, you not only buy a property itself, but also “buy” the town or urbanism of which it is part.
In this sense, it is important that you make sure that they are safe areas with high potential for revaluation. Evaluate if there is an offer of services and benefits in the environment, which positively affect the value of the property you want to buy.
Likewise, it analyzes if the value of the property is competitive with respect to the town where it is located, as well as what are the possible rental fees that you can choose depending on the property and the location area.
Buying flat or constructing it can be the great opportunity to get a price that in the medium term can generate a very juicy profitability. Check out the Construction Loan program if you opt for construction.
As in any investment, there is a percentage of risk. In the event that some external factor affects the construction of the real estate project, your investment could be in danger. Therefore, it is important to certify the prestige and reliability of the developer company when investing in projects that are underway.
Technology is changing the real estate business. Today it is possible to invest in real estate with small capitals. This is possible through real estate crowdfunding platforms.
Again, there are all kinds of options to invest in real estate crowdfunding. The most important thing is that you can start with small investments that allow you to increase your capital step by step, with the stability provided by having a real estate asset as a guarantor of the investment.
