What is a Real Estate Investment?

Well, it is an asset (buildings or land) with which:

• We obtain rent.
• We obtain capital gains.
• We obtain both of the above.

Savings are generally deposited in the bank in an interest generating account with the objective of being used for future eventualities, one of which could be investment in Real Estate.

Whether it is an apartment or a house, the most common strategy used by investors is to use the savings as a down payment for a property whose characteristics make it attractive to potential tenants, and, with the resultant rental payments collected, ensure the complete purchase of the property mortgage period.

However, it is also possible that the savings be used to purchase commercial property, plots of land fit for construction, an entire building for offices and even industrial warehouses, all of which can result in a good investment owed to the healthy returns they provide. However, the economic returns will be affected by factors such as the area it is located in, it’s geographical situation (City, Countryside or Beach..) and it’s accessibility (airports, motorways, main streets, touristic or urban zone…) or even just the square meters of space being sold.

For example, it’s not the same to invest in a two bedroom apartment in a residential zone than in a four bedroom detached house in the outskirts of the city. Even though this last one has more space, it’s peripheral location may mean a lower purchase price but a lot less profit when comparing rental rates per m2. It is a known fact that an apartment over 120 m2 or a property situated in a zone with a lower population density will be much harder to rent out than a smaller apartment or one encountered in a more central zone. It is important to make clear that it is an investment over a longer term and which is harder to exit from and harder still if one’s economic situation is over complicated.

It is necessary that you seek expert advice on when to buy, how to finance and when you should sell. When there is a surplus of low interest accessible mortgages it is convenient to sell, but the moment when mortgages become less available and no longer have advantageous conditions it can result in a loss. It always seems an easy strategy to buy before the rise and sell before the fall begins, but speculative short term investments always carry a large risk with them.

If you want to make a solid real estate investment with reliable returns, then you must be assured that the person who advises you is a professional, because that is the difference, in more cases than not, which will enable you to make adequate returns and run the least amount of risks possible.

In regard to the large real estate investments, there are those who purchase large extensions of land, with the hope that the city keeps growing and once a few years have passed, these terrains are eventually converted into desirable development areas for the market. Another type of large investment are Real Estate Investment Funds (REITs), which permit both the small and large capital investors participate in real estate projects that would otherwise be beyond their reach.

Whether sophisticated or simple, it is convenient to study the markets. This is the optimum manner in which to realize the risks involved, which, ultimately, will be economically quantified later in the project. Our real estate team of experts will make the correct decisions for you and ensure that your real estate investment bears the fruits of your labor.

You can contact us directly via Telephone or e-mail. We will be only too pleased to attend to your every need.
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