Anyone who wants to maintain the value of their assets must at some time make investments , this movement of capital is strategic and of the utmost importance to maintain and increase its value. Despite the situations that may be happening in the economic environment, mobilizing capital ensures its profitability and helps its growth. A real estate investment is one of the strongest ways to achieve that profitability, since it ensures the value of the asset and a return on investment is achieved at the time of real estate revaluation.
Why make such investments?
This is one of the key questions when deciding to set in motion an investment capital, to answer it we can establish some reasons:
You can start from scratch : a great advantage for every new person in the world of investments is to start without having an advanced knowledge of the subject. As you enter the world of real estate investments you can dominate elementary concepts, as well as other aspects of real estate. Learning the theory as well as putting it into practice is relatively simple. Starting to learn about concepts such as mortgages, yield, return on investment, rent, among others, is not limiting to find investment opportunities. What you must respect are some basic rules of the game in order to achieve a successful investment.
Calculating how much return an amount of money generates
It offers a higher return : this is explained very easily, simply by calculating how much return an amount of money generates in a savings investment in the bank against surplus value or the benefit generated by the same amount of investment acquiring real estate (land , flats or houses). Acquiring a property immediately converts it into an asset that, except for a major event, is not devalued and that over time only increases its value and serves as a guarantee to support your living condition or the execution of new projects.
It has greater stability than investing in the stock market : make investments with stocks, futures, commodities, currencies, among other instruments of a stock exchange, offer good returns, but you have to face a very pronounced learning curve, an extremely fast dynamic and a volatile market, depending on the economic context of the moment. On the other hand, a greater amount of real estate under its belt will obtain a greater economic base and long-term security.
Additional income : the acquisition of real estate grants long and medium term benefits through two modalities. In the long term, the concept of surplus value is handled, in this case we talk about the increase in the value of the property over time, in this case many factors affect the increase in the value of the property such as the construction of other buildings of equal or greater value, shops, main roads or some other important infrastructure work or the change of use of the properties, for example, from residential to commercial. These circumstances increase the value of the property. In the medium term the figure of the rent allows to generate a cash flow that can help the mortgage financing of the property, the financing of new acquisitions or simply assets in circulation for your accounts.
Increase in personal assets : a real estate investment directly affects equity, this begins to create a solid base that helps support the credit history and the possibility of new financing. Apart from real estate investments are a solid way to prepare for the future. As a strategy for eventual retirement, as a measure of protection of the interests of the family or the assets of the children, this type of investment has more elements in favor than against that it offers great profitability, stability and a variety of opportunities.
How to acquire a property for investment
Once the decision to invest in real estate is made, a lot of questions appear, the main ones being: how to get the first property? The second would be when will the investment capital return?
To answer the first question, the answer lies mainly in choosing two modalities in the real estate market. Acquire properties already built , new or already with their years; The second option is to buy when the property is still a project embodied in the plans. Both options are good, in the first one it is necessary to cancel the property immediately, being able to generate a mortgage debt, but the property is already ready for use. In the second option, the acquisition cost is reduced since at this level the value is always lower for all the waiting time it will take to build the property. Both cases have their advantages and disadvantages, but they are the classic ways to get into the game of real estate investments.
In reference to the return on investment, two important terms come into play, such as surplus value and flow through leasing. In the first case, goodwill refers to the increase in the value of the property, it implies a gain over the initial amount invested. To talk about a full return on investment, the amount obtained by the increase in value must be greater than the amount invested. As for the lease flow, at the time the property is acquired it can be offered to the public for lease, whether for housing or commerce, this lease generates a flow of money that can leverage the client in the payment of the mortgage debt if It is possible to acquire a loan with monthly payments for an amount less than the rent. If the property was completely canceled this flow would go directly to the return of the invested capital.
In any case, every investor should seek the advice of professionals in the real estate market to obtain information, techniques and strategies and thus get the best benefit from this type of investment. They will offer their knowledge and experience to achieve the objectives that the client has set in this world of real estate investments.