Investing in real estate: new form of investment?

Find out how to secure your future and that of yours

More and more people are looking to invest their capital in real estate because it is a safe investment, that does not require much effort and that is on the rise today. Although it is not necessary to be an expert in the field, it is recommended to have a team of professionals with years of experience in this type of business to streamline any bureaucratic procedure, as well as to get the most out of real estate. Do you know what the types of real estate are and their purpose?

Types of real estate and their economic purpose

Real estate, as its name suggests, is linked to the land, which can be understood as: lots, land, properties or real estate. These can function as residential, commercial or industrial complexes, among others.

One of the main reasons why properties are acquired today is to rent them. It is also very common to buy it and wait for its value to increase to be able to sell it and obtain great benefits.

The success of the rental business

The rental business is succeeding due to the current high demand. Today most people choose to rent over purchase due to multiple factors, although the main ones are job and economic instability, which leads to frequent changes of city, country and even continent almost forced.

Despite the fact that, in the long term, renting supposes a higher expense than the purchase and a “lost” money, the youngest and not so young, in these times, cannot afford a mortgage. Most confess to saving daily with low consumer habits and counting on cheap electricity, Internet or mobile phone companies.

For their part, those who jump into the pool of buying real estate also seek by all means not to increase their monthly expenses, so they resort to the cheapest options on the market. For example, the company OVO Energy offers green and cheap energy.

So, that the newly acquired property begins to give its benefits as soon as possible without having to invest too much money in it, making the investment profitable faster.

For all the above, investing in real estate is the best business alternative today. But what are the benefits that we can obtain in the short, medium and long term?

Top 5 reasons why more and more people invest in real estate.

1. To get a good retirement   

As the current situation stands, more and more middle-aged and elderly men and women see investing in real estate as a safe option for the future. Having properties to rent or sell guarantees a quiet retirement and having an economic mattress with which to live without worries. Investing in real estate you can acquire monthly income to cover all your needs and not worry about the rest.

2. It is safer than investing in the stock market.   

Real estate is less risky than investing in stocks on the stock market, since the value of a property does not change drastically, but rather gradually increases over time.

3. You don’t need to be a real estate expert.   

Although it is not necessary to be an expert, it is advisable, as we mentioned at the beginning, to have professional and personalized advice to avoid unforeseen events. Many people who invest in real estate confess they do not know certain legal aspects, these being a key factor in this type of business. Having an expert will never hurt and you can even get the most out of your property.

4. It is more profitable than just saving.  

Leaving the money saved can become an inconvenience since, although the interest rates in a bank account are not usually high, everything will depend on the changes in the economy. Investing in real estate you secure your money and bet on the business of the future.

5. It allows you to increase your savings without great effort.   

Investing in real estate is a safe and low-risk investment to increase your purchasing power without great effort. Achieving the stability that everyone dreams of and improving our quality of life, today, is possible.

The importance of valuation when investing in real estate.

Investing in real estate is a decision that requires a lot of analysis and precision, because in a market as vast and competitive as real estate, it can be very easy to make a wrong decision that is very expensive.

That is why valuing a house or apartment correctly becomes a crucial part of the process, as it is the basis for all operations related to the property.

park view society Lahore Explain the importance of real estate valuation when investing in real estate.

A base price is determined for a sale.

The main benefit of real estate appraisals is that the market price of a property is determined, which serves as the basis for negotiations in the sale of the property, benefiting both the seller and the buyer.

It is important to note that not only can a house or apartment be valued, but any type of property, whether residential, industrial or commercial, so having a correct appraisal is essential for all participants in the real estate market.

It is a requirement for domain transfers.

In addition to the sale, real estate appraisals are an essential requirement for other domain transfer operations, such as donations and inheritance, as well as other commercial operations such as acquiring a mortgage loan and obtain a loan with a mortgage guarantee.

Therein lies in large part the importance of valuation, because if done incorrectly, it would cause problems in the medium and long term.

The price of the property is guaranteed before the authorities.

Likewise, when valuing a house, apartment or any other property, the determined value is recognized by the corresponding public entities, so it is a great tool for any operation in which the property is involved, such as payment and tax return, remodelling and expansion projects and even legal proceedings.

Based on a valuation, a rental price can be determined

Based on a correct appraisal, the rent can be determined monthly of a property, which highlights the importance of valuation, especially for those people who are entering this segment for the first time.

For this, a minimum percentage of the commercial appraisal is taken, usually 1 or 2 percent, and it is determined that this amount will be the monthly rent. For example, if the appraisal shows that the value of the property is 1 million pesos, it can be determined that the rent amount is 10,000 pesos per month.

This method, however, is not supported by any technique, and the amount may vary due to other factors such as location, prices in the area and real estate capital gains. That is why among real estate appraisals there is a type called Appraisal for income determination, which determines the fairest rental value through statistical and mathematical analysis techniques.

Requirements to value a house or apartment.

There are many appraisal entities in the real estate market, but they all request more or less the same requirements to value a house or apartment. Among these are:

– Property deeds: in the name of the current owner

– Official identification of the owner

– Property receipt: ticket of the last property payment to the Municipal Land Registry

– Proof of residence: in case of being a used home, they must be presented Proof of residence such as water and electricity bills

– Architectural plan and constructive memory: these provide the necessary technical information to correctly value the property

The importance of valuation is enormous when investing in real estate, as it provides a solid foundation for any type of real estate operation.

If you are an investor in real estate, in Vivanuncios you can find your ideal property among the honeys of offers of houses and apartments for sale the country.

Advantages of investing in Real Estate

Constant income

Investing in real estate, particularly rental properties, is one of the surest routes to generating constant passive income. This is one of the reasons why this type of investment is booming.

Regardless of what economic conditions we find ourselves in, people will continue to need a place to live and companies to carry out their activities.

Real estate turns out to be a strategic investment for those who want to generate constant income. The good thing is that you can do this part time. It is not necessary that you put aside your work, nor the development of your career.

The value of your investment will always appreciate over time.

This is the only type of investment that does not lose value over time. The more time that passes, the more the value of your property will increase.

This is not to say that there are no bad times in the real estate market. However, it has been seen that those who hold onto their investments during these periods receive good returns once the market stabilizes.

The use of leverage, to achieve higher returns

The use of leverage for the purchase of properties, with good returns at the rental level, is one way to achieve higher investment returns.

There is a lot to learn about real estate, so advice is always recommended. Among them, we can highlight property brokers, lawyers, property managers, etc. They can make the investment process less stressful, as well as help you make better decisions.

You can also make use of the REIT, where you can have high quality properties. The grace of this is that you will not have to control or manage these assets. On the contrary, you will be sure that they are under the control of professionals.

The perfect route to portfolio diversification

The diversification of the investment portfolio will allow you to reduce the level of risk. Investing in real estate is one of the best ways to accomplish this.

Asset and value allocation helps ensure that a portion of your portfolio works well every time. Adding a real estate investment will neutralize the volatility of other high-risk assets. This, while reducing your level of risk, will give you more stable returns.

Fiscal benefits

When reporting income earned from real estate investment terms, you are entitled to various tax deductions. Examples of this are: repairs, maintenance, cash flow from investment properties, insurance and depreciation, mortgage interest, etc. These are deducted from your gross rental income, which reduces the total to be paid to the treasury.

Protection against inflation and market volatility

The real estate market is known to be more stable than the stock market as it lacks the daily changes in stocks.

Also, being a long-term investment, real estate acts as a hedge against inflation. This is because property values ​​increase over the years, at a rate equal to that of inflation.

The above helps you maintain your standard of living, as well as serves as a good platform to invest your retirement savings.