Investing in real estate is one of the best ways to secure your future and your money. However when you go to buy a property you need to consider certain factors so that your investment lasts and is profitable.
The connectivity, location and the developments around the property are important elements but not the only ones that you must take into account if you are thinking about acquiring a property.
Even investing where everyone is doing does not guarantee a good investment, and that is the reason why many people stop to enter the real estate investment: they are afraid of not making the right decision.
Don’t worry. If you are thinking of investing but you really don’t know where to start, we will prepare 10 tips to invest in real estate and not die trying, so you can clarify your doubts and feel safe when making your purchase.
Even if this sounds obvious, one of the first steps you should take is to define the objective of your investment. And we are not only talking about the amount of money you want to invest, you must know how you are going to use the property and what type of property you want to acquire.
Why do you want to buy the property? To rent it, to resell it, to live in it with your family? It is important that you know with what purpose you are going to make the investment so that you have very clear the area in which it suits you best to buy it. It is not the same to buy a house to live it as to buy a house to rent it. Perhaps for you it is more convenient to acquire a house in a residential area with the best amenities for your family, but if you are thinking of renting it might be more convenient to look for an apartment in a tourist destination such as Tulum, Playa del Carmen or in a nearby area of universities and squares.
Acquiring a property should not bring you worries or problems, on the contrary, it is an investment that is securing your money and your future. That is why one of our first tips is that you are sure of the real estate with which you are making the deal or advising.
Working with a solid company with experience in the market is ideal because it guarantees you have the knowledge to know which areas you should invest in, where the growth of the city is going, and the type of property ideal for you. And especially if you do not live in the city in which you want to invest.
As we mentioned in everything you need to know before buying a property in Mexico, an experienced real estate agent already knows what legal processes you need to do for the contract, this is an advantage because you do not have to worry about tedious legal processes .
Another important element that you must observe is the relationship that the real estate company has with the construction company that is in charge of the construction of the property. We advise you to look for companies that not only sell but also build, This guarantees that the properties are created from scratch, with amenities that meet the needs of buyers, based on their experience with previous customers.
One of the mistakes that many people make when investing in real estate is that they believe that the return on their investment will be immediate. And we are not saying that this is impossible, in fact there are people who acquire real estate to rent and start generating income.
You must bear in mind that when investing in real estate is not just about investing because "everybody is doing it" or "it's fashionable", you must do it in an intelligent and strategic way so that your money can grow. And this takes time.
Surely you have heard that a property is an excellent investment because its value increases over time. This is due to the increase in surplus value - later on we will talk about it - which, as we mentioned, does not happen overnight. In fact the surplus value is not something that depends on you, it depends on the location of the area and all the developments around that make the difference between the price in which you bought it and the price at which you are going to sell it, increase in your favor. That is, you will earn more for something that cost you less.
A good investor is one who takes advantage of opportunities when nobody sees them, like acquiring properties in an area that in the long term will be attracting people with the need to acquire a product that he already has: a house, a lot, etc. That’s why having a long-term vision will allow you to have better profits, since it will help you to choose the best area to invest looking at the possibilities that can be developed in the place. This will prevent you from feeling disappointed about not seeing your money right away.
When we talk about acquiring a property in the long term, it is important to see the possibilities in the area: What is being generated around? What will be built in it? How does the market move in the area in which you want to invest? Etc.
It is clear that you can invest in real estate even in times of crisis, since you know that it is one of the safest investments there is; But that doesn't mean that you should not analyze the situation to see what your best options are.
As we mentioned previously, to take advantage of a good shopping opportunity you must learn to see beyond the current situation in the area and concentrate on seeing the services they will build in it: schools, hospitals, squares, etc. And not only the developments, you have to analyze the market: who is coming, where, what are the growth rates, etc.
The Riviera Maya is a perfect example of this. Tulum and Playa del Carmen have positioned themselves as the favorites of foreigners to vacation in Mexico. Did you know that Merida is becoming a favorite destination for retirees?
Analyzing the market will help you think about the type of property you want to acquire and the use you could make of it. For example, buying a house in an area near schools will allow you to rent it or sell it easily to a family. Acquiring an apartment in an area near the beach will allow you to rent it while you are not using it.
When you analyze the market you must keep in mind the target you want to reach. Who could be your buyer? What is the most interesting thing about the property? What is the main reason they want to acquire the property?
This will help you to understand much better the investment you make, for example if you buy an apartment in an exclusive area of the city near business centers, you will know that probably executives in that area will be interested in the property because of its proximity to work. Or if you decide to acquire a house near universities it is very likely that foreign students are interested in renting them.
Surplus value is one of the most important things in real estate but do you know what it is? Basically the surplus value is the increase in the value of a property, the monetary difference between the purchase price and the sale price, which increases thanks to the area in which the property is located.
Shopping malls, developments, schools, hospitals, connectivity, etc. There are many factors that influence the increase in surplus value that do not depend on us. As we mentioned in the previous point, the ability to see beyond what the area is currently is the key to making a good investment.
Especially when we talk about Mexico. Factors like security influence the increase in the surplus value, many times for wanting to make a good purchase or take advantage of a very cheap opportunity we let ourselves be guided by the price of the property and we do not pay attention to opportunities and security. Would you live in a very nice house but in an insecure area?
One tip that we give you is: when making the purchase of a house or property, think about the difficulty of selling it later. Ask yourself, how much will it cost to sell this property? If the answer is that it will cost you a lot, it probably is not a good investment. But if the property is close to commercial areas, the location and the urban development plan make you think that it will not be difficult at all to sell it, take the opportunity and make the investment.
One of the most common mistakes is to believe that you need to be an expert or have a lot of money to invest in real estate and it is not true. If you want to invest little money and get a lot of profit, the lots are the best for you. Why? An investment lot is land that has a low purchasing power compared to a house or apartment. As long as the lot is located in an area with multiple amenities, it guarantees you profits with a not so high investment.
The lots are excellent acquisitions if you want to make your first real estate investment but you do not have the budget to buy a house or you are not interested in buying one.
It’s very important that you remember our tips 4 and 5: analyze the market and look at the surplus value. If you want to achieve a good investment, the key is to see beyond what happens around you.
Buying in presale has many benefits that you should take advantage of depending on what you are looking for. For example, if you want to buy a property to live in it, doing it in pre-sale guarantees that you can choose the property that you like before anyone else and according to your needs, such as access to private or development and More importantly, one of the greatest benefits of buying in presales is that it ensures a greater return on investment because the prices of houses or real estate increase as the construction period advances or they become popular in the real estate market.
As we explained about the surplus value, buying in pre-sale can be a decisive factor to make a good investment since you can acquire a property at a low cost compared to other conditions (for example, when the properties that are planned for the area are already finished) ) that its cost would be higher.
The access and connectivity of the property are two of the elements that interact in the growth of the surplus value, it is important to consider them in a detailed way.
It’s not about what is close, it is important to know how we can reach them and what other places they can take you, they can also give you clues on how to make your investment profitable
For example, if you buy a property near a hospital, what type of market do you think you are interested in? Doctors, people who come from other places to medical consultation, offices and stores of health products. Probably people who are more interested in the proximity of the particular property.
The amenities of a property also help increase your surplus value. The needs of the inhabitants who want a better security in the place and quality of life, This has made the real estate developments worry about providing spaces that they can comfortably take advantage of according to their priorities.
Gyms, swimming pools, pet areas, parks and private security are some of the amenities that have become more attractive for those who decide to acquire a property, since it allows them to
enjoy a quiet life without having to travel long distances or worry about having to acquire them on your own.
Try to invest in properties that have amenities that increase their value, considering the previous points such as the location of the property and areas of surplus value. The amenities will add more value to the house if they go according to the needs of the market, for example a Gym in an apartment tower is more attractive to its occupants and therefore to your future buyers.
As we mentioned in our first point, you must be clear about the objectives of your investment before doing it, but not because you are going to buy a house to live with your family you must let yourself be guided by your emotions.
Sometimes we fall in love with a property but it’s not located in a good área and this will end up affecting your investment and the return of it. Regardless of the intent of your purchase, you should always think of real estate as a business. Investigate about the subject, listen to those who have experience in the area and don't fear to ask your agent the necessary questions to help you make the best decision according to what you are looking for.
If you are determined to become an expert investor it is very important that you consider expanding your investment portfolio. Acquires real estate in different areas for different purposes. Avoid thinking about a property for something of a lifetime. While it is a long-term investment, it is important that you do not become attached to the property in such a way that you can not see the return on investment you can get. Real estate is a business and you should think about your property in the same way.
Now that you have read our 10 tips for investing in real estate insurance you are wondering, what is the best time to invest? The answer is simple. If you want to secure your future and guarantee your investment, you must start now. Why? First, because you can probably find properties at a better price and if you remember one of our previous tips, presale is the key.
Also, if you let time pass, it will be more difficult for you to acquire properties, it may be due to the availability or the increase in the price of the properties and if it is an area that is already becoming popular, it will be even more difficult. So don’t waste your time and start applying our advice, go to an estate agent and start investing in real estate, for yourself or your family.
Want even more advice? Read our article on 7 tips from the 7 richest people in the world in real estate.