Invest in real estate? Consider these business keys

Many people prefer to invest in real estate over any other investment. What do you have in mind before starting the business?

The real estate business has its keys. If you are wrong on the first purchase, do not suffer much. Have the same conviction as real estate consultants: everything is sold. You will always find someone who likes what you have, even if it takes you twelve months to find it.

The ideal is that you learn quickly and before making the first investment. Look at these keys.

Profitability

Profitability

If you have some money, you can opt for stocks, term certificates, treasure bonds, ventures, etc. Or for the real estate business. Of course, the idea is that your money grows over time, is supported by a relatively safe asset and produces a monthly income, an income. Many people organize their investment portfolio including real estate. They are considered safe, durable over time and with possibilities of income and recovery.

Now what to buy, what offers more profitability?

Normally, the most tradable properties are more profitable:

  • They are the ones that lease and sell faster;
  • At a higher price, lower profitability.

So, if you want to make the best possible investment, don’t look for an apartment where you would live, look for one that is easy to rent, easy to sell and in an area where demand is high.

Will it be a good deal? You can expect to return between 6% and 7% per year, plus recovery.

Accounts and expenses

Accounts and expenses

Like any business, you must make some accounts. For example, if you are going to buy with a mortgage loan, could you assume the monthly installment for a few months while leasing it? You will not need to borrow more to pay the credit, which would not be a super good business …

Like any business, you must make some accounts. For example, if you are going to buy with a mortgage loan, could you assume the monthly installment for a few months while leasing it? You will not need to borrow more to pay the credit, which would not be a super good business …

Likewise, expenses can affect your profitability. You must take them into account when setting the value of the rent and decide if you or the tenant takes over them. It should be clear in the contract who is responsible for what.

  • Maintenance expenses.
  • Expenses of municipal taxes.

Income tax: It is 5% of the value of the monthly rent and you must cancel it at Sunat every month, for the duration of the contract.

Standards

Standards

All cities have constructive standards that define, for example:

  • What roads are pending to be built;
  • What type of real estate is equity and cannot be modified;
  • How many floors can be built on a property.

The impact of the standards on the value of lots and real estate is immense. Can you imagine if the municipality has planned a large avenue that will pass right through the garden of the house you want to buy? Or, what view would your balcony have after they finished building a bridge in front of the building you have chosen? Do you think noise will affect the value? Imagine that you are now negotiating a lot near the Lima airport. Are you considering that the airport expansion is already authorized? It is advisable to consult the rules and mandatory routes of the property that you are going to negotiate in the register office where the property is located.

Property status

Property status

All cities have constructive standards that define, for example:

  • What roads are pending to be built;
  • What type of real estate is equity and cannot be modified;
  • How many floors can be built on a property.

The impact of the standards on the value of lots and real estate is immense. Can you imagine if the municipality has planned a large avenue that will pass right through the garden of the house you want to buy? Or, what view would your balcony have after they finished building a bridge in front of the building you have chosen? Do you think noise will affect the value? Imagine that you are now negotiating a lot near the Lima airport. Are you considering that the airport expansion is already authorized? It is advisable to consult the rules and mandatory routes of the property that you are going to negotiate in the register office where the property is located.

Property characteristics

Property characteristics

There are more commercial properties than others. Although there are some that you would like for your life. For example:

  • 200 m2 one bedroom apartment is a dream. Can you imagine the bathroom of the main bedroom? Now, is it easier to rent than one of three bedrooms?
  • A huge commercial space, with a super showcase and no parking, will be a good business for who …
  • Will a department with luxury finishes and a monthly maintenance cost of S / 700 be easier to rent than one that must pay S / 250?

Price is not the only thing you should consider. Evaluate how easy and fast you will move the property in the market.