A COMPLETE GUIDE ON ALL REAL ESTATE INVESTMENTS
If until a few years ago real estate investments were reserved for a very small circle of people, today thanks to a greater knowledge of the sector and new opportunities, everyone can approach one of the most prosperous and stable markets in the world financial system.
More and more people have more or less substantial capital at their disposal and do not know where and how to invest them.
"On the other hand, we are faced with a constantly evolving market where the" safest "forms of investment such as bonds and government bonds now have an income equal to zero or a little more", declares Claudio Citzia Founder of Luxforsale "and where alternative finance such as the stock market and cryptocurrencies require skills, commitment and still represent a much more risky investment.
The real estate market has always been a safe haven, but very difficult to approach if you don't know the nuances.
Buying and selling, residential and tourist rentals, flipping, crowdfunding, investment groups, npls, utp, immolerai auctions, Reit, there are many investment formulas on the brick.
With Luxforsale's Agency & Advisoring division we have tried to clarify each type of product.
PURCHASE HOUSE FOR PERSONAL USE
Can buying a home for personal use be considered an investment? It obviously depends on the type of solution you are looking for, on the area, on the type of property and on the price, but certainly given the low interest rates charged by banks on mortgages and in consideration of the current tax breaks, we can say with absolute certainty that the buying a property for personal use turns out to be an excellent investment.
RENT A HOUSE AS AN INVESTMENT
Renting a property has always been an excellent investment, because in addition to offering a constant monthly income, it has the property itself as underlying, which takes on value over the years and which can still be resold.
The rental properties can be for residential or tourist use.
In the first case the owner ensures a constant monthly income, with an overall limited commitment, in the second case the annual income can be even higher but with a decidedly more important commitment.
The choice between residential rental and tourist rental substantially depends on the location of the property.
But when does a rent become an income? It is not easy to give certain numbers, we can say that the investment turns out to be "excellent" if the property is paid for in 20 years, offering an annual yield of 5%.
For the investor who opts for this solution, we recommend contacting a competent operator, as the bureaucracy and the necessary documentation is quite substantial and complex.
REAL ESTATE FLIPPING
What is real estate flipping? Buying a property and reselling it.
Real estate flipping (or house flipping) is a very widespread investment formula and in this case the ability lies in intercepting a property with a price much lower than the market value, to resell it in the shortest possible time.
In many cases, the purchased property needs renovation, which is why, in addition to the purchase costs, it is necessary to carefully evaluate all the collateral costs such as the renovation and above all the taxation which is very strict on the capital gain.
It is therefore essential to know all costs in detail before approaching real estate flipping.
The suggestion is to be supported by professionals trained in the field.
REAL ESTATE AUCTIONS
With reference to real estate auctions, you can do more or less the same thing as flipping, with one substantial difference. The property, instead of being purchased through an agency, is purchased at auction.
There are several "gurus" who propose this solution as the Pandora's box, in reality the real estate auction is not as simple as it may seem.
First of all you need to know where to look for a property at auction (there are dedicated portals), once you have identified the right one it is necessary to read the appraisal very carefully to evaluate any defects in the house (e.g. building abuses, free or occupied house, occupied by those ) and finally you must be sure of having an almost immediate availability, as you usually have from 60 to 90 days from the award date to pay the entire amount.
In addition, those wishing to participate in auctions must pay close attention to the notices of sale, the extent of the relaunch, the dates of submission of the offer and the method of sale (with or without auction).
This topic would require an article on its own, for this reason we advise the potential investor who decides to opt for this solution to investigate further.
REAL ESTATE CROWDFUNDING
Real estate crowdfunding is a formula that has developed a lot in recent years. Through specialized platforms, the proponents (builders usually) present real estate transactions to investors who can decide on which transaction to invest, even with a few hundred euros.
In this way, the proponents collect the money needed for the operation by recognizing a percentage to the investor, who receives capital plus interest at the end of a set period.
It is still an investment, therefore, before launching, the advice is to check who proposes the operation (historicity, share capital) and on which operation you are investing, as if it does not go through the risk is to lose even the capital.
The club deal is one of the most interesting phenomena, even if little known as it is reserved (for now) to a limited number of investors.
In fact, it is an investment group made up of several participants who, thanks to an immediate economic availability, buy very attractive properties to resell or to make an income at a competitive price.
Often the latter solution is evaluated because if the property is purchased well and is interesting, it offers very high annual returns capable of creating an income on a property that remains owned and can then eventually be resold creating a capital gain.
It is not easy to access club deals and usually the entry threshold is medium / high.
Reit, or English acronym for Real Estate Investiment Trust, is a real estate company that finances and owns properties that generate income for investors.
Similar to the club deal, the reit is more regulated, more complex and requires specific requirements such as 75% of the capital must be invested in real estate or government bonds, 75% of the turnover must come from renting or buying and selling real estate and 90% of the income must be divided among the members.
Reit is the form of investment that is closer to the financial market than to the real estate market, for this reason, before approaching this formula, the advice is to turn to consultants who are trained on the subject.
As we have seen, the real estate opportunities market is conspicuous, but complex if the right entry keys are not known.
For this reason, the advice is to inquire or rely on expert consultants before making any choice.