Invest in real estate will always be a good deal for those who know how to do it. In any market, there are always offers and opportunities. The purchase of a property or perhaps several according to your capital, is an alternative to make money work and secure your future. Real estate offers financial security to investors large and small, which will have a positive impact on both the local economy and your portfolio.
According to BBVA Research’s Real Estate Situation report in Mexico, housing continues to be a profitable investment in general terms. Although investing in real estate involves a large investment, the risks are less and it is a good option for achieving financial stability and growth.
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There are 3 ways to invest in real estate:
1. Buying and selling of real estate. Buying and selling a property is a sure way to protect your money and keep it growing. Although it is not as easy as it sounds. Why? Because you have to require a solid investment to achieve it and that investment can be your own capital or a mortgage.
When you acquire an investment commitment of this magnitude, you agree to face all the obligations and deadlines involved in the process of buying / selling real estate; such as tax and service payments, credits, notarial services and others that may arise in the process.
On the other hand, investing in real estate often involves lengthy procedures in private and government institutions, such as public banks, Infonavit or Fovissste.
2. Rental. It is an option widely used today. It is about buying a property to rent it later, either for commercial purposes or for residential purposes. In this case, the performance or profit will be reflected with the monthly rental fee. The advantage is that, depending on the quality of the maintenance applied to the property, the more its added value (value) is important and it is possible that the person who rents it, is ready to pay more.
3. Crowdlending. This term is very fashionable; it refers to a way of investing and obtaining financing. And this is achieved through FinTech, which is dedicated to raising funds from small investors through technology known as “blockchain”.
Gather a group of investors, who acquire part of the property to later lease it to others. In this way, it becomes possible to invest in this sector with smaller amounts of money but which allow higher returns.
Why invest in real estate to make your money grow?
If you decide to invest your resources in real estate like property and land, you can get some of the following benefits:
You will have security and flexibility in the future. Buy real estate is an action that is sure to protect your finances and your future in the event of an economic or personal emergency. That is, you will enjoy the flexibility of starting more businesses with the same properties and continuing to increase your capital and income capacity. In addition, real estate is considered a long-term financial guarantee in case of need for loans, mortgages or retirement.
The return on investment increases. Any return on investment is calculated according to the conditions of purchase, the capital gain and the flow of money that the said good obtains after its acquisition.
It allows the value of a property to increase over time. It all depends on the existence of a large real estate project, major roads in the neighborhood, or whether it becomes a fashionable neighborhood.
You have to take into account that the price and value of a property are totally different concepts. You may have acquired a property for a price. However, its value may be different from what was initially established and increase over time.
This increase in the final value will allow you to obtain an increasingly important return on investment, which makes it more attractive and useful to profit from your other investments.
Make your money work
Another advantage is that you make your money work. Without a doubt, the added value, as we explained above, makes investing in real estate an activity that pays off financially and helps you build up part of your wealth.
The investment options are varied and low risk. Invest in immovable is very safe, the risks are low and you can use your properties creatively.
Investing in real estate doesn’t necessarily mean you have to buy a home with a mortgage. There are many real estate options for investing such as (houses, traditional apartments, residential apartments, apartments in buildings, real estate under development, building land, commercial buildings, floors, among others).
This wide variety of investment options will allow you to diversify your money and have less risk of losses due to fraud, sudden changes in the economy or natural disasters.
Invest easily and quickly at your convenience. Investing in real estate is very easy compared to other businesses. Real estate is the most accessible area for those with capital.
However, this rule is not followed by everyone who wants to invest in real estate, there are many options for you to adapt your monthly payments to your lifestyle and ability to cover debt, perhaps having ‘an important savings plan, which allows you to take the first step, check your constant income and organize your finances, without losing your capital.
Investor ABC and the fundamentals of investing to take into account
You don’t have to be an expert to get a good return on your investment. The key is to recognize the limits and be aware of them.
However, when acquiring a property there are certain things that you need to evaluate, such as connectivity, location, and developments around the property, in order for this investment to be profitable and successful.
Set your budget and save. The first thing to do is determine how much money you have available for your investment. Investments in real estate are long term; If you still don’t have enough money, look for alternatives that require less money to start or start a savings plan as the main goal so that you can invest in a timely manner in the future.
Think about the purpose of your investment. It is not just about how much you want to invest, but how useful you will give the property and what type of property you plan to acquire. Why do you want to acquire the property; rent it, resell it or live there? It is important that you know for what purpose you are going to make the investment so that you know very clearly in which area it is best for you to buy it and what kind of profit you expect.
Consider the deadlines to be reasonable and long term. The return on investment is not immediate, you have to be very patient for your property to gain value and be worth selling. Usually, investments mature in a period of 3 to 5 years.
Focus on the future productivity of the asset you envision. If you want to invest a little and get a lot, lots are the best for you. Why? Land is land that has a lower purchase cost located in an area with a lot of potential and will make you get a greater profit thanks to the added value of the area.
Look at the added value. The surplus value is the increase in the value of a good, that is to say the monetary difference between the purchase price and the sale price, which increases thanks to the zone in which the good is located. . The security of the area in Mexico significantly increases the appreciation of the property.
Examine everything down to the smallest detail for your safety
Be very careful and careful when obtaining a property, the details are extremely important, you should consider that the property is registered in the public register, know its tax situation and investigate the registration process.
Avoid acquiring property by will, that is, by inheritance. In that sense, do your research before you buy the presale. For BBVA this is an attractive option to invest due to the high levels of capital gains that can be generated, finding a project that is at a very early stage, whether in a model or in a plan, will have a significant increase in value at the end of its construction. The key is that you take the time to research the developer in Profeco, to ensure their track record and reliability.
Invest wisely, not emotionally. Emotional attachment to the things we own, many times, does not allow us to make the best decisions.
Avoid thinking about a property for life. Real estate is a business and you should think of your real estate the same way.
And as former US President Franklin D. Roosevelt said: “Real estate cannot be lost or stolen; they can’t leave either. If bought with common sense, paid for in full, and handled with reasonable care, it is probably the safest investment in the world ”.