For the small real estate investors need to advise them to poderles sell. Logical? Well, it seems that for some this fact escapes them. Let’s discuss how you can advise people and companies interested in investing in one or more properties in plots for sale in islamabad.
Advising is a better way to sell. In this case you will be selling your knowledge and experience, providing a help, support and guidance service to those who pay for it.
Take advantage of a very profitable market niche that needs real estate advice provided by professional agents A niche of small private investors who do not go to large consultants to advise them. Here I will not try real estate crowfunding
It is not enough to have the knowledge, contacts and experience of the real estate market to properly advise on how to invest in real estate. Or have prepared a manual to invest in brick. You need to know how to help buy. You will need to sell confidence before selling your advice.
“A good real estate consultant, in addition to knowing the real estate market where he works, needs to know how to sell his knowledge and experience. The advice to real estate investors needs selling techniques and convincing his or her investor is the right person.”
When you become a successful real estate seller, this is the type of customer that will come to you the most and you will prefer to help buy.
Always remember these 2 characteristics of real estate investment:
First : each real estate investor has different reasons to invest and does not perceive in the same way the profitability or the maturation time of the investment. You have different expectations on how to make money in real estate
Second : as with buying a property, the investor expects to follow an investment protocol, (which does not know very well which one it is), in which he feels safe, important and comfortable.
The real estate investment advisors should know how to know what their clients want when investing in a property and show them this investment protocol that they are willing to travel with you.
This investment protocol can be divided into 7 phases to make a successful real estate investment :
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- Demonstrate the profitability of the real estate sector.
- Report the advantages and limitations of investment in the market.
- Negotiate the purchase of real estate.
- Inform about the importance of documentation.
- Inform how to finance the purchase of a property.
- Inform how to manage your investment.
- Get new business.
Let’s talk briefly about each one of them:
| Advising Small Real Estate Investors. Demonstrating Profitability.
The first thing you should do when a small real estate investor contacts you in order to buy one or more properties for investment is to show that you have made a wise decision . No matter what you already know, show him how other people or companies in your area of influence have allocated part of their savings to real estate investment as a way to create wealth.
Most real estate agents when contacted to present investment strategies for small savers tend to feel very expert and vanity plays tricks on them. In addition to not bothering to know what the client really wants, (they are too busy feeding their ego), they give too much information from the start. This is not the time to show everything you know, but to listen.
Proving to your client that you dominate the real estate sector does not sell , does not generate trust, does not give good feelings, does not solve problems and does not help to buy.
“Demonstrating your knowledge what you get is to be the center of attention and not your client, you will get the client to feel unintelligent, not comfortable and not tell you the real reasons why you invest, what you expect from the investment and how much you want to invest. “
For example, if your client wants to invest in Bogotá in apartments, show your client the advantages of investing in real estate in Bogotá. Prepare in advance a brief dossier to deliver to your client with data on the real estate sector, comparisons between other financial products, (shares, pension plans, raw materials, …), with the advantages of investing in the sector and examples of Investment in your area. The media can provide you with these comparative examples, you just have to search. Internet in a good source.
For example, present your client with a report where, in addition to the advantages of investing in real estate, include the disadvantages.
This is the best way to build trust from the start and surprise him with your preparation. Your client should feel safe and comfortable to tell you what he really wants. To have a Real Estate consulting service for Small investors.
By asking questions and listening, you can find out what your investment profile is, how you like to invest and what you expect from your investment. Find out first how you think, what your mental map is, determine what type of investment best suits your personality and then advise you little by little. Follow the protocol. Or better yet, create it yourself.
| Advising Small Real Estate Investors. Why are you your best choice?
The next step to follow is to inform the small real estate investor of what they will earn using your advisory services.
A person with extra capital in their bank account will always be tempted to invest in another home to increase their assets and think that having the money to buy, (= having the power), is enough to make a good investment.
You know that this is not the case and your job is to be close to these people at the right time, to show them that obtaining profitability from a real estate investment is not that simple and requires professional advice to maximize equity without running unnecessary risks. .
Many people entrust their savings to real estate assets. Most clients interested in investing in real estate are unaware that a property is purchased with credit capacity and not with savings; They don’t know what their true credit capacity is and they don’t even know what it is to have credit capacity or how to get it.
In addition, customers always tend to accept the mortgage conditions offered by their bank, without thinking that they can get a loan in better conditions at another bank or in the same if they do their homework. And you must be there to get the highest possible credit capacity and the best mortgage conditions. So you can invest in that real estate investment opportunity you have chosen.
Knowing under what parameters the area should be chosen is important , the number of rooms in the property is important, the parking accessibility of the property is important. Why not buy a business premises or an office to rent instead of buying a home?
Your advice is still necessary when negotiating the purchase of a property; not only because you are more familiar with the documentation and the buying and selling process; but because your client will cost you absolutely nothing your advice.
Your fees will be covered by the property owner and this commission will not be passed on to the purchase price.
But in addition, your advice is still necessary when choosing and getting the tenants of the property.
A very convincing way to prove to the small real estate investor that your services are necessary is by presenting a real example.
Take for example a person who with an “extra” capital of $ 300,000 in his bank wants to invest them in the purchase of a property. The most common is that not being an experienced investor buy a home of approximately $ 260,000, (+ 10% of purchase expenses + furnish the apartment for rent), and allocate it to rent, where you can, for example, enter $ 600 rent all months.
This is the typical investment , where the investor buys a property with his own money, without using his credit capacity. This is a bad investment.
“The client has missed a great opportunity to increase their monthly income and increase their assets. And that counting on you having made a good purchase and getting a tenant quickly. ”
With the right advice, this small investor, (and most of your potential investors will be small at the beginning), could increase their assets significantly in less than 5 years. Always talk about increasing equity and not just return on investment when advising a client.
The same previous client with a capital of $ 300,000 in the bank and good advice can get a debt or credit capacity between $ 600,000 and $ 800,000, depending on their personal situation. In other words, you can get a mortgage loan of approximately $ 700,000. With a loan of $ 700,000, your client could buy, for example, 3 homes of $ 210,000 each, (+ 10% of management fees + furnish), and allocate them for rent. The well-managed rental will cover at least the mortgage expenses, and the administrative expenses.
Or, why not invest that $ 700,000 in an industrial building or in reforming a property?
The small real estate investor does not consider investment alternatives in commercial, industrial or land real estate because he does not know how to obtain profitability. Offer alternatives if you have some; Certain clients will prefer to invest in real estate that is not residential.
However, without adequate real estate advice , the client will not be able to make such an operation even if he knows what his real credit capacity is . The customer can know numbers, but does not know where and how to buy to get the maximum possible appreciation in the market.
On the other hand, you will have to solve an important problem that is finding the appropriate tenants and collecting the appropriate rent so that this rent covers the mortgage expenses, administration expenses and the payment of taxes. This is one of the ways in which a real estate investor makes money
Only when the client is personally looking for the tenants does he realize what it costs to find them in time and money . This is a trick that you can play to win a customer; show that you know how to avoid not having a tenant for 2 or 3 months; Or better yet, you know how to prevent your property from being rented from the wrong person or company.
Every tenant, whether company or private, has certain characteristics. The client does not know how he behaves, what are the interests of a tenant when looking for a property for rent. 70% of the decision to rent a certain property does not depend on the rental price; but about aspects such as payment conditions, the way in which the contract is written, the type of deposit required … This is not known to the client.
“Show the customer with examples why he needs your services; it is not enough to inform; The customer needs examples, he needs to trust. It reinforces its decision to invest in the real estate sector and to come to you ”.
The main mistake made by some real estate agents and other advisors, (bank office managers, lawyers or tax advisors), when they advise their clients, is to try to impress them with their knowledge of the real estate market. They do not know that the client needs, first of all, to be supported in his decision, (which on the other hand is not yet fully taken), to invest in real estate.
Put yourself in the shoes of the real estate investor. What does an investor need before anything else? You need to know that you will be advised by the right person , who will put your money in the right hands.
Earn credibility with your client first. Without credibility, the client does not listen . The client does not understand. The client gives you false information. The client does not have your opinion again for very good real estate investments that you show in your country.
| Advising Small Real Estate Investors. The Investor Profile that interests you.
How to choose your ideal investor ? What is the profile of a real estate investor? Any company and person with credit capacity. For example capital smart city
I would like to banish the idea that some real estate agents have of believing that real estate investors are people of high purchasing power , with certain assets already created and with knowledge of the real estate sector. They believe that companies buy a property when they need to open an office or expand their facilities. Nothing is further from reality.
Let’s start with the companies.
The general public knows the great promoters and investors of the real estate sector; However, it is the small investor and the small developer who create the largest amount of real estate investments in any country. It is these small investors who most demand adequate advice.
Your potential real estate investor is the small business owner. The small, well-managed company with few workers and in a niche market with little competition is your ideal customer. Its owner or its managers want to grow and understand real estate investment as part of that growth.
This client is a good manager, understands the general investment and is very likely to have a capital to invest in excess of $ 500,000; which means you could have a credit capacity between $ 600.00 or $ 800.00. This kind of client, although considering any type of investment, prefers to invest in offices and commercial premises.
This type of client tends to seek professional advice and sometimes even pays for it.
“The private investor you will find the most is the professional, (male or female), in his 40s who earns a salary above average and has a medium-high cultural level. From here on, they are investors over 60, those who show more interest in investing in this sector. “
And finally you will find a conglomerate of all kinds of people, the least, who have extra money to invest and prefer to do it in real estate.
Each of the previous groups invests or alone, without advice most of the time; or with another person or in a group, with advice in most cases.
Being part of a Real Estate Investment Club or creating a company dedicated to real estate investment are ways of investing that are growing in Spain because they are more profitable and safe.
This is where your great opportunity is and a very profitable market niche: advise real estate investment clubs and help create real estate investment companies.
A Real Estate Investment Club is basically a group of people who decide to invest in real estate and properties of all kinds to diversify the risk and access better buying opportunities in the market.
The number of participants is limited and decisions are made in a collegial way. From the legal point of view it is a community of goods and not a society, which is very important . From the fiscal point of view. The operating rules are included in statutes sealed and registered by the Treasury.
Remember that an Investment Club is an association of natural persons (legally constituted as a Community of Assets ), which gather a wealth to manage it jointly and learn the mechanisms of investment in real estate and the fundamentals of the economy.
From the above definition, what I would like to highlight is that the main objective of an investment club is not only to earn money but to learn. The fundamental objective of an Investment Club is to train its members in real estate markets.
“Another way to invest in very attractive real estate and increasing the number of supporters is the creation of a company dedicated to real estate investment . This is the kind of client that you should aspire to create, advise and manage. It is your most profitable client and the most in need of your services. “
Your purchasing capacity gives you the possibility of having access to investment opportunities that are unattainable for other investors with less capital. These “real estate investment” companies buy, sell, exchange, form partnerships with developers and earn money by managing their portfolios well, choosing their purchases well and choosing very well when to sell.
| Advising Small Real Estate Investors What to Invest in?
The type of property in which your client will invest will be based on their own personality, the capital they may have available, (their credit capacity) and the objective they want to achieve.
Never lose sight of these 3 factors.
First, the client will tend to invest his money in that type of property that is more familiar to him or in which he feels more secure doing so. There are small aggressive real estate investors who prefer to take a calculated but high risk, and conservative investors who are only comfortable with a low risk investment and medium return.
There are those who prefer to invest in industrial land, build ships and then sell or rent them. Others prefer to buy residential real estate plans … others in offices or premises; others believe that investing in land is the best option and thus the full range of types of investors.
Here you must analyze what are the “ Emotional Reasons ” that the client uses to invest in a property. Analyzing them you will know what type of real estate investment is best suited to your personality.
Second place every investor will be conditioned by capital you have available to invest. Your capital can condition you to invest alone or to find a partner to take advantage of a business opportunity.
It is time for your client to inform you of the capital available to invest. Tell me about your creditworthiness , why you should use it in the investment and how to get it. In a second meeting, your client has a fairly real idea of how much he can or is willing to invest.
Thirdly, the type of property that you must choose is based on your investment objective as a percentage of profit and in time established to achieve this profitability. You have to know how to set investment objectives, maintain them and leave the investment when it has already been reached.
“A fundamental rule in real estate investment is to leave an acceptable profit on the property for which it comes behind.”
You do not invest in a property for life. The attractive, fun and highly profitable of this business is that you buy a property for sale, manage it for a while and sell it for a profit. Then you can buy another property and start over or say invest in another business.
90% of the causes that lead to an investment not producing an acceptable return or not being carried out after having invested time and effort in its planning is the lack of a tangible and defined investment objective. Obtaining the maximum possible benefit is not an objective, although it is difficult for many investors to understand.
It is unrealistic to want to get $ 200,000 in profitability in 1 year, investing only $ 300,000 in 2 apartments on the coast. But if the objective of obtaining a 35% return in 2 years can be realistic, buying 2 apartments on the floor at a price of $ 120,000 each. This is a clear and attainable objective that has been previously established based on an analysis of the circumstances of the property and the market.
“It has always been said that to establish real estate investment objectives you need a bit of science, (make numbers) and a little art, (have intuition); to maintain the established objectives you need some character and to sell when achieved the goal it takes a little courage. “
Avoid, in any circumstance, to advise a client who resists to establish an investment objective with you or who changes the objective two or three times during the search process. You can be sure that any investment that you advise to this client, is destined not to flourish and only you will be the culprit.
Remember the following: the client will make the decision to invest, (or not to invest), in the property that you recommend based on, not your advice, but based on his emotions , based on what he or she calls his instinct . After all, his instinct brought him to the situation to be an investor.
| Advising Small Real Estate Investors. Your Service and your Fees.
In the first meeting you have with the small real estate investor, always finish describing the service you provide, how you do your work, what your fees are and based on what these fees are set.
Acting in this way is a sales technique that saves you time, misunderstandings and unpleasant surprises . The message that reaches your client is clear: you work in a professional manner and under an already designed plan, which makes you, not him. If you let your client set the tone, that is, where to look for the property, how to negotiate, which bank you should go to, etc., it will end up telling you how you should take your business.
Also, do not let your client be part of the plan or interfere in your work. Here it is all or nothing. As you let him only take care of getting the mortgage, looking for the notary, (which he knows and is very good), you are bound to have problems .
Do not worry if most clients do not accept your terms, conditioned by a real estate observatory. Those who accept it (will be more and more) will be the best customers you can have. For example, in my consultancy my partner and I have carried out this policy from the first moment and we have saved many problems.
We agree with the client what our work is and we make it clear that we will not allow any situation change . If, despite this agreement, the client wants to get more involved than he should, we leave the advice immediately and do not resume it under any circumstances.
The client’s function is to make the final decision to invest or not, when all the information about the investment to be made is presented.
And finally you must tell the small real estate investor what your fees are and the payment method. Let me know that your fees, (this is an example), will come from 30% or 50% of the commission you get from the seller. The rest must be for your client that will be reflected in the final price of the property. The client will be surprised with this revelation and that is precisely what you are looking for. Build trust
“I recommend that this commission, (usually between 3% and 5% of the sale price), never be increased in the sale price. This formula is very tempting, but you will do yourself a disservice if you apply it Sooner or later the consequences will splatter you. “
The way to pay the buyer this 50% or 70% commission is important. We advise you to pay this amount to your client at the end of the transaction when everything has been signed and the keys delivered. Pay this amount through registered check, bank transfer or cash if your client so wishes; but never discount that 50% of the price of the property or the discounts of some other administrative concept.
Do you think the customer is not entitled to this 30% – 50%? Do you think that acting in this way does not value your work ? If that’s what you think, if that’s how you think, we have to tell you you’re wrong. The small real estate investor does not appreciate it that way and its appreciation is more important than yours. The first thing your client thinks is that the commission, (the whole commission), could also have been achieved by him if he had wanted to and that your advice, after all, was not as necessary as you made him believe at first.
When you have the buyer’s “chip”, the business is appreciated differently. Do not forget.
Do you think that by advising investors you earn less in commissions than selling real estate directly? It depends. Of course you earn less in commission if you advise only 1 investor with a small capital. But what happens when you are advising a group of investors that you have managed to join together to invest a capital of, say 2 million euros? In this case, 30% -50% of the commission negotiated is a fairly significant amount.
Remember that the investment group needs to get tenants, manage the investment … who do you think is going to do it? Who do you think they will pay to do it? Yes, you, your consulting or real estate agency. Therefore, you earn more than you initially thought.
Delivering 30% – 50% of the sales commission to your client, no more, no less, at the end of the process and in the aforementioned way , has a psychological impact on the client that will increase your credibility. You have finished the first phase of your advice by applying once again the 3 Golden rules of real estate sales.
| Advising Small Real Estate Investors. Advantages and Limitations of Investment.
The second step in real estate advice after having demonstrated the profitability of the investment, is to inform the client of how the real estate market is in the area.
Avoid giving this information at the first meeting. You have already said enough to show him the good decision he has made and how successful it has been to consider your advisory services.
Agree on a second meeting with your client to discuss the real estate market in your area and what are the best alternatives at this time. What you are doing is establishing a protocol where your client feels comfortable.
Your subliminal message is: “I don’t know everything, your money is important, so we must do a preliminary market study before properly advising you.” This is the protocol that the client wants, although he wants you to give him all the possible information from the first moment.
Now is the time to prepare statistics, market data and everything that is of interest to the customer. You will prepare sales dossier including the emotional reasons that you consider are important to make the decision to invest in a property.
“Once you have earned the trust of a small real estate investor once again and you know what your investment profile is, it is time to look for what he / she needs and continue educating you in the real estate sale.”
The second meeting is the time to show your client how the real estate sector is structured in your area, the types of real estate that exist in the market, the advantages and disadvantages of investing in residential real estate, commercial real estate, industrial buildings, land and real estate in production if any.
Now is when you can show your client your knowledge and experience of the market. Present statistics and market research and teach them how to interpret them. Show him clearly that you are going to help him to buy and you are not going to offer him only the real estate that you have in portfolio.
Some real estate agents think that giving clients information about where to invest or teaching them how to negotiate the purchase of a property goes against their interests because once you educate the client they will dispense with their services since they know how to invest.
It is not the case. The real estate consultant who thinks this way is missing many opportunities in this sector, because it is clear that he does not understand what real estate sales are and does not understand the 3 golden rules.
On the other hand, the small real estate investor who acts in this way, who seeks your advice to later invest on their own, is a waste of time in senses tones. The only thing we can tell you in this case is that you learn to identify them as soon as possible and waste as little time as possible with them.
People who think exclusively of their interests, willing to use your knowledge and not value the service you provide, move professionally in a problematic environment.
You will never get a good return on your real estate investment . These people will have problems sooner or later in their business; so it is better to stay away from these “investors.”
Let’s discuss the aspects that you should take into account when advising an investment client about the advantages and limitations of investment that different types of real estate have in the market.
1.- Invest with a Real Estate Developer.
This form of real estate investment is very safe and profitable if you find the right developer. The ideal promoter is generally a small company that intends to build a small housing development or wants to build 1 or 2 industrial buildings for rent or sale.
Why is the developer going to accept an investor in his company instead of building with his own money? Because developers need bank loans to be able to build. If the developer has an investor with adequate capital, money is saved in the mortgage loan, requesting less or no amount than in principle he needs to build.
It may also happen that having a small real estate investor gives the developer the opportunity to develop a larger project and earn more money.
If your client or group of clients have significant capital, contact the promoters sky marketing islamabad through the association of promoters and builders in your area. An informative note to its board members is usually enough to obtain several calls from promoters looking for investors. In our case, a simple advertisement on the bulletin board of the Vigo Builders Association generated 7 phone calls from promoters interested in sharing their benefits with one or more investors.
The return obtained from an investment of this type is quite high and safe.
2.- Invest in Land.
When considering investing in land, the possibilities are very varied due to the multiple characteristics that a plot or plot can have, its location and its building conditions in terms of permits and construction volume.
A small real estate investor who invests in land does so exclusively to resell it to a developer in search of land and make an acceptable profit in proportion to the time he keeps it under his property.
The land can be acquired and then sold in a single unit; subdivide it and sell it for smaller plots to developers or other investors or put it as capital in a joint venture with a builder.
The real estate investor will obtain greater profitability for his investment with the sale of the houses that have touched him in the joint venture, that with the sale of the land to the developer. Above all, if the investor has been concerned with obtaining the building license , other permits and improving the land in some way before entering into a joint venture.
This business is also profitable for the developer who does not have to pay anything for the purchase of land.
Investing in small plots is also profitable, but the investor must wait for it to revalue over time and then sell it or invest in building and then sell. The maintenance of the land is an additional cost that you should consider when advising the client.
Investing in slightly larger plots, say from 5,000 square meters is a matter of having enough capital and improving the land in some way to increase its value.
A land is improved in several ways, bringing infrastructure to the area, (water, electricity, access roads, …), conditioning the land for easy construction, subdividing the land in plots , getting the necessary permits for building and even preparing a building project for approval.
In any case, the sale of land under these conditions is guaranteed and is profitable for both the investor and the buyer. There will always be demand for this type of land.
If you can find a plot of 5,000 square meters or more at a reasonable price, the profitability will always be greater than investing in any other real estate product.
3.- Invest in Industrial Buildings or Industrial Land.
The industrial sector grows in proportion to the services provided in an area; which in turn are subject to the increase in population and the opening of new businesses. Investing in the industrial buildings sector has no science and is more profitable than investing in commercial or residential real estate.
Industrial areas are nowadays concentrated in industrial parks or parks equipped for this purpose and located in strategic locations outside the city center and near ports and airports.
Generally, heavy industry or production is concentrated in industrial estates. Industrial parks are places to locate clean businesses in terms of noise and vehicle traffic . Today many companies are established that prefer to have offices outside the cities with ease of parking and equipment, which makes this type of investment attractive and profitable.
Investing in the construction of industrial buildings is a very profitable investment if you know what type of industrial building is in demand. Not all ships are the same, some require cold storage , others space for parking of roads, etc.
This type of property to invest is usually chosen by companies or investors that move in the industrial or distribution sector.
4.- Invest in Offices.
When investing in buildings destined for offices, these 3 aspects must be taken into account: the size of the building where the office is located; the common spaces and the total space destined for office, to know what type of company can be considered as a tenant.
The place where the building is located is also important, but it is not the factor that most interests a company looking to rent an office.
We recommend that you invest in offices with as many square meters as possible and that can accommodate medium-sized companies. The larger the tenant company, the lower the risk and the duration of the rental can be 2 or more years.
Better to invest in new offices than in old offices of 2nd occupation. New offices tend to be clear, (without walls or separations), and be prepared for new technologies. Not so the offices in buildings of the 80s . However, you can find offices of 2nd occupancy at a good price and once refurbished they can offer a good monthly rent.
“Perhaps the problem of investing in offices is the search of the tenant. The less tenants the office has at the time of maturity of the investment, the better for the investor or owner.”
It always helps in the investment to buy 1 or 2 parking spaces together with the office. In addition to increasing the rental price, it increases the value of the office when it is desired to sell. We recommend that garages are always rented as part of the office and not as a separate space.
One method that we have used with enough acceptance and efficiency when looking for a tenant that lasts the entire maturation period of the investment is to look for a tenant willing to pay a rent slightly higher than the market, but with the advantage that you can buy the office at 2 or 3 years at a previously agreed price and discounting monthly rentals and payments. That is to say; rent with the right to buy.
This formula has never failed us and the small real estate investor obtains a return of more than 30% each year on our investment. It is also profitable for the tenant who pays for the property with his own rent.
This type of rental with option to purchase requires a fairly clear contract and forecasts of revaluation of the property and income that is beneficial to both parties. Why is this formula not more popular? The answer is that not all landlords help their tenants to pay the rent for mutual benefit.
When you invest in offices, the tenant is the most important part of your business, even more than the property. Do you want us to tell you stories not to sleep of owners who have lost up to 30% of their estimated final benefit because of a tenant?
5.- Invest in Commercial Premises.
Everything we have said in the investment of offices, we keep it in the real estate investment of commercial premises . The commercial premises produce a higher rent than the offices but also their cost is greater, with the aggravating fact that it is very difficult to find space for commercial premises in main streets.
Buying a commercial space on a main street is difficult and sometimes it is only achieved when you build a new building on the street. The demand for these stores is large and they are usually purchased from the developer on the plane.
If you find a store with these characteristics, it offers the developer better payment conditions than other offers. It offers, for example, to pay 60% of the price of the premises to the promoter before it is finished and written. Builders always have cash flow problems, so your offer can be tempting at any given time.
“Commercial premises in secondary and tertiary streets are also profitable if you know how to look for the type of company that does not need to be on a main street to conduct your business.”
There are many businesses that meet this quality: being on a main street, they will not get a much larger number of customers; since its profitability is more in the service provided than in its location , although the latter always helps.
They are usually home service businesses or services that are sought in the area such as shoe stores, florists, gyms, dry cleaners, bakeries, etc …
6.- Invest in Flat Homes or New Homes.
The most popular way to invest in real estate is to buy apartments or flats in the construction phase or on a plane, to be used for rent. It is not the best of real estate investments when significant capital is available, since the time elapsed between the first deposit and the delivery of keys is a time misused from the point of view of an investment.
It is also necessary to add the time elapsed between the delivery of keys and the conditioning of apartments or flats to rent and search for tenants.
This form of real estate investment is fine for small investors who make their first attempts in the market.
When investing in this type of property, the endowments of the building or residential complex where it is invested must be taken into account. A residential complex with a pool tends to substantially increase community expenses and generate unforeseen spills. A house with a pool does not tend to rent for a higher price than the one offered in the area.
We advise investing in small residential buildings or complexes, where there are few owners and reasonable community fees . When there are many owners there is always someone, (too many) who do not pay or pay late.
We also recommend that you invest in areas away from city centers, especially in coastal or tourist areas, since these properties tend to revalue more than those located in the heart of the city or urban centers and are easier to sell.
7.- Invest in Housing of 2nd Occupation.
The key to the success of investing in properties of 2nd occupation is to invest part of the capital in the purchase of the property and the other part in its improvement for its subsequent sale; Although investing to rent is also business.
We are inclined to invest in the reform of a home, include all the technological advances and put it on sale after 6 or 7 months of work. With a good budget and making the improvements oneself, the small real estate investor can obtain up to 50% profit.
This form of investment is very attractive for certain people who know the construction sector, know where and how to choose the materials, know where to find the right workforce and are willing to work themselves in the construction and decoration of the home .
If you know how to choose the property to be reformed and a realistic action plan and a detailed budget is drawn up, success is assured because the buyer appears before finishing the work.
Many small real estate investors ask what is the best area to invest to achieve maximum profitability. I think the right answer is: anywhere where there is drinking water . It may seem like a joke, but it is not.
“Our experience has not shown that the location is not the most important thing when it comes to investing. You cannot buy the best property with limited capital or succeed in investing if it is unknown how the real estate sector works. Without the necessary capital you cannot have access to the best areas. “
For an investor with $ 2 million dollars a 30% return in 2 years can be a good investment. To the same extent it is for an investor who invests $ 200,000 and obtains a return of 30% in 2 years.
As far as real estate investment is concerned, profitability cannot be measured by the capital obtained from the investment, but by the percentage earned on the initial capital. Not everyone has $ 2 million dollars to invest and, on the other hand, not having them should not limit a person to make a good real estate investment with their capital.
Once you have analyzed all the real estate investment alternatives in your area, prepare a report with the advantages and disadvantages of investing in each property and present it to your client.
In addition to showing that you are a professional, your client may have a better criterion when it comes to investing and may choose a different type of investment than he had thought of or, better yet, to associate with another person or people to have access to an investment opportunity that I did not know.
We would be grateful if you would leave us a comment on this article. Do you think that a small real estate investor does not have access to good opportunities in the market? Your opinion interests us. Thank you.
