Real estate investments are strongly rooted in many countries, and we are not surprised. The idea of obtaining a one hundred percent passive monthly rent by renting a house is so attractive that it is difficult to see the negative side of it. However, it is not gold, everything that shines.
In this article, we offer you 5 tips for your real estate investments.
1) Do the numbers well
The first thing you must be clear about is that a real estate investment carries many economic risks and, therefore, it is not valid for all types of investors.
The liquidity of a home is very low, so if you decide to buy one, do your numbers well and make sure that you are not going to jeopardize your financial stability.
Ideally, you should have significant savings and also have a stable income. In this way, you will be able to face the mortgage payment and all the expenses that are hanging from a house if, in the worst possible scenario, you do not find tenants.
2) Study carefully the house in which you invest
A home is not exactly cheap, so if your intention is to buy it as an investment, there are certain factors that you cannot miss.
The main one is its location. There are residential neighborhoods, luxury neighborhoods, neighborhoods in the suburbs, and each of them has its own particularities. You should also assess if it is a noisy area, if there are parks, hospitals and schools nearby, etc.
Also look at the age of the building, the orientation of the apartment, its shine, its state of preservation. And, of course, the price. It is the most important factor of all and the one that will ultimately determine whether or not it is a good investment.
3) Analyze the mortgage
A very common mistake of many brick investors is not to give importance to the mortgage. They believe that anyone is worth it, and they are wrong.
The current mortgage offer is very large, and it is possible to find loans of all kinds. To differentiate between good and bad mortgages, you must analyze the interest rate to be paid (fixed, variable or mixed).
If you want to reduce the total amount of interest, we recommend that you shorten the repayment period of the mortgage. The difference between a loan to be repaid in 20 years and another in 30 is that for the second one you may pay double the interest.
4) Check that you meet all legal requirements
If you want to avoid headaches in the future, you should study all the legal aspects of the purchase. For example:
In investments of this type, it is better to err on the side of caution. Never take anything for granted in such a controversial sector as real estate.
5) Do not rush and invest only if you have no doubts
These types of investments take time. You can’t have an outburst, believe you have a bargain, and want to close the deal in 24 hours. Real estate investment does not work that way.
No need to be in a hurry. You should see a lot of flats and in different areas of the city before deciding on one. You can check real estate websites like that also allow you to track the properties you like.
Study each apartment you see, talk to the neighbors, get to know the neighborhood, check how the rentals are in the area and, in short, invest only when you have no doubt that you have a good plan before you.