The Wisdom Of Investing In Real Estate

 

There is little doubt that it makes good investment sense to buy real estate. Owning property is a great way to generate a continuous stream of income. Furthermore, real estate routinely appreciates in value with the passage of time, something everyone can get behind.

Perhaps you will use real estate as one of the pillars of your overall wealth building strategy. Of course, it is important to be fully prepared before entering the realm of real estate investing. In contrast to other types of investments, real estate requires real expenditures in terms of the initial purchase, property taxes, maintenance and more in order for it to be an income generator going forward.

It is also worth noting that there could be lulls in the income stream if a property lacks tenants for a given period.

Here’s an excellent guide to help show you the steps;
Simple Ways to Invest in Real Estate

Cash Really Is King

It is common for investment gurus to caution investors against using borrowed money to obtain properties. This is advice that should be carefully reviewed prior to buying a rental property. It is far better to build enough reserves to make this purchase in cash.

It is important that if financing is needed, the payments on the loan are manageable, even if the property should sit empty for a bit. Otherwise, the property can become a financial albatross rather than a wealth building tool.

It is never wise to depend on rent payments to keep the mortgage current. You are almost certain to face periods of time without paying tenants, and you may sometimes receive late payments from renters as well. It is far better to protect your own credit and financial future by ensuring that you do not get trapped into an unaffordable mortgage on investment property. It can take time for a rental home to start generating profits if income is always used to pay off a mortgage.

Anticipate And Prepare For All Expenses Related To The Investment

Whenever you buy real estate as an investment vehicle, it is necessary to think about how much taxes will be and how they will be paid. It may make sense to use a management company that can help make needed repairs and perform rent collection tasks. While this is a savings of time for you, to be sure, it will also come at a cost. It is crucial to carefully weigh the pros and cons and run the numbers to determine what is best.

When setting a rental price for your investment property, always take these types of expenses into consideration and make certain they will be covered in full. It is also smart to build a reserve fund for unexpected repair items. Insurance must also be kept updated and in place if unpleasant surprises and shortfalls are to be avoided. Placing rental payments into the reserve right away is a terrific method of creating a sizable reserve.

The Importance Of Due Diligence

Should you decide to buy land in order to resell it later on, it is crucial to do your research. Deed restrictions, future development plans nearby and other such factors can make a huge difference in what you will be able to sell for in the future. While such elements may end up boosting the value of your property, the opposite can also be true. By performing a good deal of investigation in advance, you can make an informed choice with regard to the quality of a potential investment. Otherwise, the risk involved with a given plot of land may just be too immense to accept.

Baby Steps

Savvy real estate investing newbies routinely launch their careers with the purchase of a home that contains a small apartment within it, or perhaps with a duplex that is great for renters. Doing this provides valuable early experience, though it may not always be desirable to have to live in the same structure as your tenants. It is wise to do the math and make sure that mortgage payments and other expenses can still be met even if there is no tenant present.

Prior to seeking a renter, it is necessary to verify that the space is compliant with all relevant building codes. A management company can certainly handle this task, but again, there is a price for this type of service. Over time, you will start feeling more confident about your abilities as a real estate investor, and you will be able to move into owing multiple properties. The end result will be a reliable stream of income generating investments of which you can be very proud.

 

Why You Should Look To Tenerife For Property Investment

The tropical climate of Tenerife makes it ideal for those who would like warm weather all year round while still living within the confines of Europe. The island is less expensive than most tourist destinations in continental Spain with lower real estate prices compared to the national average, which makes it an excellent investment opportunity for property buyers.

As is the case in almost every corner of Spain, the prices of apartments and houses are also increasing in Tenerife. The average price per square metre was around €1,200 in 2016, with properties in Santa Cruz de Tenerife, the capital of the island, fetching almost €1,400 per square metre. The market is expected to grow steadily throughout 2017, although at a slower pace than Madrid or Barcelona.

Which Areas in Tenerife Are Most Sought After?

Although the island is small compared with Sardinia or Cyprus, Tenerife has a wide variety of landscapes with average temperatures of 18 degrees Celsius and higher, even in winter. The main tourist areas are Las Américas and Los Cristianos on the South of the island. For beach lovers who want to enjoy warm days and sunny weather all year round, the southern areas will be ideal.

There is an established Los Cristianos estate agent in the south who can give you all the advice you need to make the right choice when purchasing a Tenerife property either as a home, or as an investment.

If you don’t mind cooler weather but would still like to live right next to the sea, the north of Tenerife has a more temperate climate compared to the south. At Puerto de la Cruz most days are cloudy due to its close proximity to the 3,700 metre Teide volcano, the highest mountain in Spain.

San Cristóbal de la Laguna, known as the university city of Tenerife, has a very mild mountain climate that can be very pleasant when most other places on the island become very hot. It is situated just a few kilometres from Santa Cruz if you need something that can only be found in the capital city.

For city lovers, the best option is Santa Cruz de Tenerife where all the basic facilities such as big shopping malls and hospitals can be found. Due to the small size of the island, the beach can be reached easily by car within an hour. The highway connects the South with the North and other main routes make it easy to reach any place on the island by car in less than three hours.

Easy Access to Spain and the Rest of Europe

The island is reachable only by plane or ferry and has two airports in the North and South with connections to all major cities in Europe.

British, Italians, and Belgians are the top investors although the British top the list, as in other parts of Spain. There was also a considerable interest by Russian investors during the economic boom in their country and as a result, there are quite a few restaurants and shops promoting Russian food and goods in their language.

Tenerife offers the prospective home buyer more than any other location in Europe and in recent years, better returns have rarely been found elsewhere in Europe. Property prices have increased comfortably for homeowners in Tenerife making it an extremely attractive destination for anyone from the UK looking to relocate to a warmer climate while staying within the borders of Europe.

There are several well established estate agents in Tenerife to choose from and Lupain is the one we recommend. They’ll be able to guide you through the process and the language barrier if you’re not Spanish speaking.