Knowing how to make the right choices, investing in real estate
Searching the details
First of all, it is advisable to carry out good research, either by hand, through field research, through the internet, through newspapers, by phone calls, through the media in general, through consultations with specialized professionals, or through conversations with friends. In this planning stage, you should consider issues such as location, prices (smaller initial investments), demand, type of property, property characteristics, reliability of builders or developers, and brokerage fees, for example. Check if the company has pending issues with Procon and make sure that the engineers, architects, and brokers involved are duly accredited.
As a way to prevent headaches in the future, it is essential to record all expenses (actual and possible), always saving a certain amount of money for those unforeseen events that usually happen in absolutely any business.
Analyzing profitability
This is certainly one of the main criteria to be taken into account to better choose the real estate investments you will bet on. After all, every investor aims at profitability in the deals he closes, right? Therefore, considering the potential return will help you not to make investments that demand high capital and offer little profit. It is necessary to analyze, for example, if the region in which the property is located is good, generating demand from the population. After all, if there is demand, the possibilities of profiting more become greater.
The truth is, investing in real estate can take time. And since time is also money, knowing some shortcuts can make the return appear faster. So write it down: the important thing is to calculate all the costs you will have with the investment and subtract them from the probable profits to confirm if the transaction really pays off. If by chance you delegate the management of your investment to others, outsourcing this task, it will be necessary to calculate the expenses and compare them with the profitability.
knowing the space
A property basically boils down to a space. But more than focusing on the internal space, it is necessary to remember that the property is located in a certain environment, which involves a condominium, street, neighborhood, district, and so on. To assess the potential of the property, it is necessary to know more deeply its surroundings.
In fact, the size of the property, the number of rooms, its physical state, the architectural model, and all its other characteristics will weigh in when making an investment. But it is also necessary to assess the infrastructure of the region. Is public transport sufficient? How are accessibility and sanitation? And public services in general? Also check out the profile of the residents and the short, medium, and long-term perspectives that the region offers.
Investing in used
Bear in mind that it is quite different to choose between a property to live in and a property to invest in. Have you ever thought that simpler used houses, apartments, or townhouses can offer great opportunities for profit? The Association of Borrowers of São Paulo and Adjacencies ( AMSPA ) states that cheaper and simpler properties have a higher appreciation potential than luxury properties and larger enterprises.
Buying used properties and renovating them, adapting them to the needs of modern users, can be a good way to attract customers. Not to mention that, often, when intended for a lower-income public, which cannot afford such well-equipped properties, these properties even require major renovations.
betting on rent
In both big cities and small towns, it is possible to see how, with each passing day, more and more people are looking for rental properties. It is worth mentioning that most popular properties are simply ideal for rent. Other almost certain options are beach houses and commercial rooms, as well as flats.
Rooms for rent are highly sought after by self-employed professionals, but it should be noted that purely commercial buildings tend to work better in more developed cities, with high competitiveness for space and clientele. And as much as you need to invest a little more, co-workings also stand out in this rental scenario, including bringing more chances of return.
considering the land
Contrary to what many people may think, investing in land can also bring a great return. In the same way as a built property, land purchased today may be worth much more in a few years. In this context, it is especially necessary to analyze the region, which can undergo several improvements over time.
It is very common for growing companies to buy adjacent land to increase their equity, often paying very well for it. Another way to make money with the land is by building. That way you not only value your land more, but you can still profit by putting any property for sale or for lease.
The land is also used by companies to publicize their brand or products, through the installation of billboards and other means of advertising. Depending on the location of the land and the client company, the investor can obtain a good return with this strategy. Finally, if the land is larger, it is worth thinking about the subdivision!
Taking advantage of consortia
Many people of vision make real estate consortia a very profitable form of investment. In general, they participate in consortia that offer cheaper properties, anticipate the contemplation of the letter of credit through bids, put the property for rent, and pay the consortium installments with the rent.
It is very common for these investors, when choosing the property for purchase, to choose the most popular regions, with high demand for housing. After all, this way the property doesn’t stay for so long, generating loss instead of profit!
Thanks for reading this article by ExtNext, hope you will learn something about real estate investment
