What are the pros and cons of real estate investments?
The property has always been the investimento favorite from Italian because it's good tangible you can touch, use and manage as you want. Despite the current crisis, indeed, immovable property is still considered the me refuge because they never lose their value.
As all forms of investment, But, Also the property has its pros and cons, you need to know to invest your money consciously.
In this article you must in detail the advantages and disadvantages of an investment property so that you can tell if it is a solution for you.
What it means to invest in property
First of all I want to clarify this concept: making an investment property does not mean buying a home to go to live or for vacation.
Invest in property means to employ a capital per buy a property and make a gain, selling it or giving it for rent.
Here are the downsides of an investment property.
DISADVANTAGES
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minimum by high investment figure
To invest in property you need a certain amount of money.
An investment property starts with the purchase, so you have to have a capital initial to buy the property you can make you get an interesting earnings.
The minimum denomination, I always suggest that those who make investments with us, and of 100.000 euro.
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Capital tied up for months
With property investment your capital remains stuck for a certain period of time.
When you buy to resell, you'll get your money, and the percentage of income you deserve a sale concluded.
When you buy to make income, Your initial capital will be returned along with your income through the rental fees.
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Taxes and service fees
Investment in the purchase of a property you have to consider all the costs involved.
In the first phase, in addition to cost of acquisition Property must take into account other initial expenses (is. notary), i management costs (is. works of restructuring and upgrading) and tax.
In the case of an investment property with income generation, you must also add maintenance costs and administrative expenses (is. condominium).
Here's the positives instead of investing in real estate.
ADVANTAGES
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tangible asset
Unlike financial instruments, property investment have at the base a tangible asset that you can physically see, touch and use as you see fit.
Being able to "touch" the good you know where you invest your money to use in something real, with a intrinsic value that will never disappear.
Real estate, indeed, It has a value in itself remains so regardless of market conditions and trading.
Keep in mind, Furthermore, that in case of need you can use the same property as collateral to apply for funding.
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investment control
Think about when you buy a stock: often the market moves unfavorably due to unforeseen events such as terrorist acts, coups or civil wars.
With real estate you have a higher degree of investment control. This wider margin for maneuver will let you better manage risk and your earning potential.
You can for example take action with the property optimization works, through work restructuring and upgrading capable of increasing its value and make more profitable Your Investment.
You can also make strategic choices such as the increase or reduction of rent.
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Great earning ratio / risk
Think of a vacation home in a resort town, in an apartment in the center of a big city or in a building in a university area.
You can understand why a real estate investment has a high potential for profitability.
You earn over the 10% HE resell property, until the 7% annual if you put it in lease and also reach the 10% with short term rentals.
The biggest advantage is that real estate investments offer you, along with this return, also a bass profile of risk because they are always in demand in the market and are a real asset on which you can have a high degree of control.
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relatively short time
An investment property can end in a reasonably short time, often less than one year, if you resell the property purchased.
According to the data for the first months of 2016 the time of sale of a property ranging from about 159 days in major cities 170 in the provincial capitals and 180 in the hinterland municipalities.
Although it may seem like a long time, thinks that no other type of investment can ensure a gain of the 10% in so little time and with such a low risk profile.
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Well so there is always demand
It is an objective fact: the buildings are goods of use, to buy or rent, of which people will always need.
This is why the demand properties will never disappear.
Although in recent years prices have dropped a lot, the house is a good which has and will have its own value.
That's why it is considered by many a safe investment.
The price of housing, indeed, He can never fall below a certain threshold because there will always be the need to buy. A need that, as deferrable, It will still have to be realized sooner or later.
Summing:
To do so an investment property you must have a minimum capital to invest, which will remain "firm" for a period of time, and you have to deal with various taxes.
In the face of these "disadvantages", But, you're dealing with a tangible asset always required on the market, you can see and use as you see fit at any time, and that allows you to make an investment you highly controllable, in fairly quickly, with a excellent relationship between income and risk.
However, knowing how to exploit in their favor all these benefits to make a successful real estate investment it is not easy. You can not improvise.
Investing in real estate profitably and without to make mistakes It requires thorough knowledge of sector ea largest ongoing commitment.
You must be able to understand and address all stages of investment he technical aspects, tax and legal Related, from the search of the property in which to invest up to the sale or development income. For this I suggest you follow step by step from a true professional.
If you think that real estate investments can be for you read this guide we have created for those who want to start invest in real estate.
