Why now is the time to buy a Costa del Sol Hotel
19 June, 2020
Blog
#OnlyInSpain
How to invest in property?
What is an investment property?
An investment property is a real estate property purchased with the sole intention of earning a return on the investment either through rental income, the future resale of the property, or both options. This property may be invested by an individual investor, a group of investors, or a corporation.
An investment property can be a long-term endeavor or a short-term investment. With the latter, investors will often engage in flipping, where real estate is bought, remodeled or renovated, and sold at a profit within a short time frame.
To put this in different words, a property purchased for investment is one that is not purchased with the intention of using it as a residence. They are purchased to generate income through dividends, interest, rents, or even royalties that fall outside the scope of the property owner’s regular line of business.
We will explain later in the article why buying property in Spain is a fantastic chance for investment and please get in touch with us to find investment property on the Costa del Sol.
What types of Property Investment are there?
If you read what an investment property is and it’s something that you’ve been looking for then let us explain to you the different options that are available within this technique.
It’s possible to invest in Real Estate in a myriad of different ways, whether you’re interested in investing in residential properties or in commercial establishments or you want to do it a different way.
We’ll explain some of the options you have:
DIrect Investment: Buying property in Spain
FLIP A HOUSE
A great form of investment is buying a property in Spain, fixing it up and then selling it. Also called flipping a property. Especially in Spain this is a great form of investment since renovations are relatively cheap.
However, you need knowledge of the real estate market and home renovations or a knowledgeable agency on your side to make this work.
BUY A RENTAL PROPERTY in Spain
Alternatively, you can buy a property in Spain that you then rent out for profit. This could be either one house that you rent out entirely or a building with flats or even an apartment you rent out per room.
If you have a capable real estate agency on your side and snatch a property at a good price, this could be a very profiting long-term investment.
PURCHASE A VACATION PROPERTY IN SPAIN
Buy a property in a great location in a popular vacation area and you’ve got the recipe to profit and happiness. You can rent out the property short-time and also use it yourself as a vacation home. It could be even more profitable if you use lodging apps like Airbnb.
PURCHASE A COMMERCIAL PROPERTY
Buy something that is not meant for someone to live there but rather to be rented out to companies, let it be a retail or office building. The initial cost is higher and you might need a partner but you can also gain a lot more with this option.
BECOME A HOUSE OWNER
Do you want to or maybe already have bought a house to live in? Then you should know that a house owner is also always a real estate investor.
If you are investing in your property to improve it then you very likely also increase the property’s value. Treat it as an investment and make good and logic choices and when you want to switch it for another property you will hopefully be able to get some profit.
Real Estate Investment Trusts
If you’re not looking to purchase a whole property in one go, you can try investing in Real Estate Investments Trusts (REIT’s), which are investments funds that dedicate their investments in property exclusively.
REIT’s are easier to invest in and much easier to exit if that’s what you want. When you invest in a REIT your money is going to be used to purchase a property joined with the sums from other parties that are investing in the same group. You’re paid returns based on how the investments is working, and the level of rental income generated by the properties within the trust.
There is also the option invest in REIT with a so-called REIT ETF (exchange-traded funds), so rather than investing in real estate you invest in the REIT itself.
WHOLESALE A HOUSE
This action is similar to flipping a house but you are not actually buying the property. You will be the middle man contracting a seller and finding a buyer for the property. Usually, the buyer will pay a higher price and the wholesaler keeps the difference as profit.
INVEST IN A REAL ESTATE FOCUSED COMPANY
If you don’t want to directly invest in real estate, another option for you is investing in a real estate focused company. You could look into investing in a real estate business or in a company like RE/MAX that works with independent real estate brokers.
INVEST IN A HOME RENOVATION COMPANY
Fixing up homes is the latest trend and not only due to the countless tv shows that circulate around the topic but also because there is a lot of potential in these renovations. If you want to invest in another real-estate-related business maybe a home company could be interesting for you.
You could also go bigger and invest in a home construction company, so you put your money in building new homes rather than flipping old ones.
Investment Property on the Costa del Sol
As you can see there are types of investment for every taste and nearly every amount of money you have available. Especially Southern Spain’s coast has a rich offer and you will find plenty of investment property on the Costa del Sol. The area is highly liked by locals and foreigners alike, which gives you more chances to find worthy investments or business ventures with a focus property investment.
If you are interested in any investments or would just like to talk to us about the purchase of a property, don’t hesitate to get in touch with us.
