Real estate investment is a great choice and many people see it as a very attractive option as it can be an option both for major investors and for small investors alike.
If you’re looking for a way to make a profitable real estate investment and handle your capital successfully, it’s of vital importance to keep certain premises in mind.
Why invest in the real estate sector?
The real estate sector is one of the best places to invest if you have savings. The market is registering an upward trend and its recovery is real.
Part of the good moment the real estate market is experiencing is due to three factors:
- New development is once again underway, not just in the provincial capital cities but also on the coast.
- The GDP is registering positive growth.
- The rental market continues to grow. In 2018, Spanish families spent 35.32% of their income on paying rent. In 2019, this amount will increase and reach 37%.
Real estate investment continues to offer higher rates of return than other investments.
What's needed to invest in the real estate sector?
This is a common question for first time investors in the sector, but there’s no need to panic. Basically, all you need is to have some money saved up that you’re not going to need for at least five years and, of course, to set some goals and consider the returns you hope to obtain from the investment.
Having said that, how long will it take to see returns?
The first thing you need to think about is what your time frame is. Whether you’re going to need the money in the short-term or whether you can do without it for the time being and obtain good returns from it in the future.
If you choose the latter, we’re going to tell you how to make a long-term investment. When you invest in real estate for long-term rental, you must concentrate on cash flow. The best way to obtain a large amount of cash flow is to buy properties for less than their market value, make repairs to increase the value and choose homes that provide high returns in relation to the purchase price.
Buying a property to rent out
Buying a property to rent out is a good strategy to obtain profits and long-term returns.
- If you consider this strategy, it’s important to bear in mind both the maintenance costs and what your cash flow (income) will be like in order to avoid losses.
- Location is a key point when it comes to buying property to rent out.
You may be thinking this investment thing is pretty complicated, but don't panic! There’s a company in Spain that specialises in finding the best real estate investments: Property Buyers by SOMRIE. They're specialised agents in finding the real estate assets you’re looking for.
There's also another way of making a long-term investment in the real estate sector.
This form of investment generates high levels of cash flow and the properties are generally rented out for long periods of time.