Housing is the preferred option for many investors. The sector’s recovery over the course of 2021 is also leading to the emergence of a significant number of new investors. But how do you know if it is a good investment? What should you take into account for your investment to be a success?
To begin with, the most important thing is that the amount you are considering investing is viable with respect to your financial situation: the expenses generated should ideally not exceed 40% of your salary.
Once you are clear on this point, it is time to do some research into the best areas to buy a home, average price, type of home, and energy certification for example. Gaining a clear understanding of the housing environment will help you invest as successfully as possible.
Congratulations! You have found the perfect home to invest in. Now what?
Another important aspect is the question of taxes: make sure you take into account everything that the purchase of a home entails with regard to matters of taxation, which will vary depending on where you are buying. It will also depend on whether the home you purchase is a new-build or a second residence, since the tax rates will differ accordingly.
As you probably know, the process is not necessarily going to be rosy from start to finish. You should never forget that real estate constitutes an asset that is not very liquid; this means, of course, that when it comes to selling this will not be as fast or easy as if the investment had been, for example, in stocks.
Last but not least, you will need to decide which best suits your situation – investing to sell or to rent.
If you buy to rent you will enjoy benefits in the form of the additional monthly income, not to mention tax deductions. In general, finding a tenant is quite fast, due to the current economic climate and the existing offer.
On the other hand, if your idea is to buy in order to sell, you may obtain speedy benefits by increasing the price with respect to that which you bought the house for, and, if the house is new or semi-new, the process will be much faster, since, as with renting, there is not so much of this type of housing currently available.
These are some of the aspects that you should take into account when investing in housing. What others can you think of?
