Would you like knowing the keys for investing well in the real estate market?
10 Tips for investing in housing.
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How can be sure to make the right investment in housing?
When buying a property, You must take into account if the objective will be to live in or as an investment to make profitable it.
Main doubts arising in the purchase of a property is usually the analysis of prices, the choice between buy particular or by real estate, get the best mortgage loan, the recurring and tax expenses and the revaluation of housing in the market.
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The progressive increase in the price of housing and rents, together with a new opening of access to bank loans, It has generated a wide range of possibilities for new owners. Are thinking of buying a House? Read by this interests you.
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How can be sure of making the right investment?
The first basic tip is “do well accounts”. Buy an apartment whose mortgage does not consume more than the 30% wage NET is essential.
The Bank is always going to request have saved at least the 20% of the price of the house that you want to buy to assume the payment of the purchase-sale expenses.
It is advisable to a “mattress” for extraordinary expenses that can arise, What is known as “provision of funds”.
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Invest in Flats
Select the best areas to invest in Malaga
It is very important to make a good analysis of prices and appreciation of the floor who wants to acquire.
Take into account the prospects for growth and expansion of the city can give us an idea of how the market will grow.
Choose a fixed or variable rate mortgage will depend on the evolution of the European Central Bank reference rates, However, experts agree that fixed-rate loans offer some guarantee, the current type of variable mortgage can be very beneficial.
Above all, We recommend consulting with a Financial Advisor to advise you according to your needs. It is necessary to review and make calculations of how much the monthly mortgage payment would rise to different scenarios according to Euribor, order to be prevented in a sudden rise.
1. Performs a preliminary study on revaluation
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The price is the main variable to take into account and is directly linked to the potential revaluation. Whatever the purpose of the housing, a good investment is characterized by combining an attractive price with solid future expectations.
In areas with high demand, There are only a few options to get rebates, to largest offer, easier to negotiate for the buyer.
Why is it important to make a good analysis of pricing and revaluation? Because the purchase of a flat is one of the most important investments in our society. Vital needs will guide through different stages and our House will have to adapt to each of them.
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2. You set your budget
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The budget is a key factor. Before hiring a mortgage loan, It is important to know what monthly expenses that can be paid. The ideal is that the mortgage do not assume more than the 30% the main household salary, to avoid unnecessary risks of non-payment. Hence the importance of conducting a feasibility study with a trusted financial advisor.
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3. Choose well do fixed or variable rate mortgage?
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The current moment offers very favorable for the buyer mortgage conditions. do mortgage to fixed or variable type? Fixed rate loans have become star product, since they offer a stable security in the long run and now represent one third of the total contracting, but variable mortgages are still more attractive if they are considered short-term, to avoid possible drastic rises.
I mean, if a very low and stable Euribor were maintained for the next two years, variable interest rate loans would still be more interesting than the fixed.
As a consequence of the judgment on the ground terms as financial institutions have already begun to raise prices of mortgages at fixed rate. Inform you of the terms and conditions before you sign.
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4. Meet the costs of buying and selling
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Buy home has several tax effects and is taxed by various taxes. It is the case of conveyances and documented legal acts in several communities.
In the second-hand housing, the buyer is obliged to pay a property transfer tax (ITP), el ITP is located between the 8% and the 10% on sale price reflected in the public deed of sale, unless the value ascertained by Hacienda is greater: in this case, the percentage will apply on the value checked by the tax authorities.
The tax of Documented legal acts (AJD), It depends on the autonomous community concerned. The AJD, in the form of notarial documents, gravel Scripture, records and notarial evidence through a fixed fee and another variable.
5. Community costs affect the profitability
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Thoroughly check out community charges and the charges or debts which would result in the purchase of the apartment. If these are very high, or monthly payments are charged between few neighbors, It will cause the investment to be less profitable.
Each year a fee will be charged for Tax on real estate (IBI), It taxes the possession of a, in function of their rateable value and the location. This tax is vital to keep that in mind in order to put it on the rental market since its annual rise can make the rent fee.
6. Advantages of buying a House to reform
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Buying a home to reform can count on interesting advantages. A higher discount on the final price and the possibility of designing tailor-made House.
It analyses the strengths and weaknesses of the housing points. Insulation, ducts and lighting require special attention. For this purpose it is necessary to prepare a concrete project, that fits perfectly to our needs and budget, to avoid future errors.
7. Save a money for extraordinary expenses plus
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Real estate experts recommend having two economic mattress. On the one hand the 20% the price of the property that you want to purchase, to pay for the part not covered by the mortgage loan. And another percentage of the costs of buying and selling own savings, such as the deed, notary, Agency and real estate.
It is important that a professional conduct a technical inspection that determines the State of mechanical systems, the general arrangement and estetico-ambientales conditions.
Remember to check all the State of the property before taking the final step. Check thoroughly the possible hidden defects of the property. Keep in mind that there are extraordinary costs that may arise after the purchase of housing. If the seller knew the vices and not declared them, or if because of your profession you should know them, be liable to compensation for damages.
8. Visit the neighborhood
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Además, It is advisable to talk to the neighbors to find out what it means to live in that community. Visit the neighborhood is essential to know if it fits or not to the buyer transportation needs, schools, shopping and lifestyle.
The area in which the home is located is as important as the inside of this.
Tour the area at different times of the day or times of the week to meet the influx of traffic, characteristics of residents, possible alternative routes and services that you can find near home.
9. It emphasizes the
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The downtown areas of large cities are very solvent demand, They offer high returns and are home to an important commercial activity. In them, buyers to live regularly as investors looking to put the apartments for rent have an expectation of Revalorization safer than in other areas.
However, they do not have to be the most profitable. Buy a home in neighbourhoods generates double the profitability that those dwellings acquired in the Centre and that the centrally located neighborhoods need an investment significantly more to acquire the property, When is your rental income not so superior to those that can be generated in the periphery. ”
The yield/risk ratio is optimal in the periphery.
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10. Please use caution
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It is so important to objectively know the market before you make a decision, How to give a quick response when the occasion arises.
To visit several homes, with different characteristics, will help to implement the priorities, Learn more about the tastes and know what are the real needs to get return on investment.
“The help of a good real estate adviser will provide greater security when making a decision”.
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REMEMBER THIS FORMULA
Total net profitability of housing is obtained by dividing the rent revenue (subtracting them all costs) between the price of the property, most the revaluation to 12 meses. For example, a flat which costs 100.000 euros and is rented by 500 euros per month (6.000 euros per year), with an expenditure of community, IBI, etc, de 2.000 euros in the 12 meses, has a net yield of the 4% (4.000 euros of net revenue divided among the 100.000 price). If its value is of the 3%, the net profit would amount to the 7%, by the implied equity gain, According to the Institute of business practice.
If you still have doubts about the investment in Malaga, You can contact us in any of our offices.
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