03 Dec What properties are the best for investors?
The ideal properties for investors
Housing has never ceased to be a good refuge for private investors and it is especially in times of crisis when they are most attentive to “hunt” the best opportunities.
You may be wondering: Why? The main reasons that justify investors focusing on real estate are, without a doubt, the profitability that can be obtained with vacation rentals compared to the low benefits offered by classic financial products and in times of crisis it is when they can be achieved the so-called “bargains”, very profitable products at very competitive prices, so that the recovery time of the initial investment is considerably shortened.
The investor usually buys in cash, that is to say without financing and this because he is looking for a specific type of home depending on whether it is intended for vacation, residential or student rental. And here we come to the most interesting question:
What type of properties is an investor looking for?
Small apartments with 1 or 2 bedrooms maximum. And why?
Mainly for three reasons: attractive price, average profile of tenants / tourists and diversification of investment in various properties.
As he expects high profitability from the rental, be it regular or vacation, the investor usually focuses on downtown homes or in areas where there is sustained demand. These are usually real opportunities so that, although it is necessary to make reforms to improve the product, in the end the price continues to be adjusted and a good profitability is obtained.
In what areas?
The investor also knows very well where he has to buy a house because not in all places he can obtain the same profitability. There are two types of investors: those who buy in the central or coastal area of a large city in order to recoup their investment with the tourist rental and, on the other hand, those who buy in not so central areas, real estate with a high cost lower, with the sole purpose of amortizing your investment with long-term rentals.
With what purpose?
For a few years now, the investor has been buying with the intention of renting, since lately the house has not revalued as high or as fast as 15 years ago. The difficulty of achieving profitability with the sale of a renovated home is due to the fact that market prices are very tight.
Before taking the step, the investor must assess the amount invested in the property to know if a reform would really be able to revalue the home with profits. Today’s investor buys to rent and is profitable at a time when rents are skyrocketing and demand is increasing.
The current profitability of the rental is between 4% and 6%, percentages that vary according to the type of rental, residential, tourist or for students.