7 Tips to make a good real estate investment

Buying a home has always been considered a good investment, whether you buy it for your own use or sell or rent it again seeking a constant and safe return. 

In this post, we explain how to minimize risks to the maximum to achieve the highest profitability.

Do you want to know what are the advantages of buying an apartment rent it? 

Buying rental homes has a number of advantages such as these:

• Get a constant income that you can use as income, amortization, or for future investments.
• Given the difficulty of many people to buy a house, renting every day is a more demanded option.
• The rent is faster than a sale and the procedures easier.
• Renting a house provides you with a secure income and you continue to maintain the property. In addition, it is very likely that over time it will become of a higher value.

Tips for investing in real estate

Assess the price of the house and its potential

When buying a home, you need to assess the price and its potential for profitability.

The Banks offer the annual profitability of a home on a quarterly basis, which is the sum of the rental profitability and the rise in the price of the home. That is, the capital gain you get from its sale.

According to data from some banks, the profitability of housing (the year 2019) was an average of 7.5%, which is divided into 3.7% for rent and the rest for its increase in the sale price. 

Reflect and take into account all kinds of investment aspects such as:

If you have the opportunity, find out and research about the sector and the news to keep up to date with everything and establish a good sale price. Consult the different options with experts in the sector.

Analyze how to get the money for the investment

The most important thing when investing in housing is that the investment is in line with your income: you must be able to assume it comfortably.

Once you have it clear, look for financing in the event that you need it for the acquisition of the property. There are currently quite a few opportunities in the banking sector.

Thoroughly analyze the prices in the area and try to buy below the market price. Don't be in a hurry, look for the best opportunity.

Establish a percentage of monthly income

What is one of the most important factors when investing in a home? Without a doubt, the budget. 

You should know what your monthly expenses are and make an analysis of your income in the short and long term.

The most advisable thing is that the mortgage expense does not suppose you more than 40% of the main salary to avoid risks and if you have savings, even better. Therefore, you must take into account factors such as:

• Economic and labor stability.
• The mortgage.

Analyze and review community expenses. If they are very high, they will make the investment much less profitable so remember, take into account all the details!

You also have to count on the fact that every year you are obliged to pay the  Real Estate Tax and all the expenses that owning a property entails.

Location of the home

One of the most important factors to ensure the profitability of your investment in a home is that it is in a population of more than 50,000 inhabitants.

In addition to this, you have to take into account aspects such as:

• The state of the home.
• The neighborhood where it is located.
• The population in which it is located.
• The proximity to schools, shopping centers, and shops.
• Transport and connections.

Ultimately, the location of a property is essential to set its value and is one of the things that buyers or people looking for a rental take into account the most.

Choose cities with more than 50,000 inhabitants

It is better to invest in cities with more than 50,000 inhabitants.

In this way, you will not have much difficulty finding tenants willing to buy or rent your home. 

It is very important to prioritize the area. The best? We recommend you bet on large cities or new cities such as the New Egyptian capital those that are in high demand and therefore higher profitability.

Legal aspects

If you have invested in a home or premises and want to rent it, you have to take into account a series of procedures that you have to go through:

• The law establishes that the tenant has to pay the owner a monthly payment as a guarantee. 
• There is an annual update of the CPI.
• You must declare the income in income tax.

In the event that you decide to dedicate your apartment to vacation or tourist rental, you will have to comply with the administrative requirements established by each Autonomous Community.

Take time into account

When buying a property you have to take into account, among many other factors, that the outlay is very important and that the more you can save on the purchase price, the higher the profitability you will achieve.

Without a doubt, there are good opportunities in the market and of course, you have to search to find what you need!

As in any search, this one requires time, therefore, do not rush when buying. Take into account all the aspects mentioned above, find out, be attentive, and wait to take advantage of the best opportunity.