If you have arrived here, it is because you have considered investing in housing to rent but you still have certain doubts. It is true that before the rent rises, many people consider buying homes to rent them later since they prefer to invest a large amount of money to obtain profitability later. Throughout this post, SPV Moartages has given you the keys to investing in real estate for rent and where to invest in housing.
We will tell you that many people bet on investing in housing to rent because they assume that of all the investment options, it is almost the most profitable and safe.
You should know that in famous cities, prices have risen so much that the ceiling is being reached and profitability is beginning to drop. In fact, right now people think of living in the periphery, so profitability must be sought in those areas.
Reasons to invest to rent
There are also those who prefer to invest in properties to rent in the centre of the city hoping for profitability. Why would it be a good option for you to invest in rental properties?
- Most young people do not have enough money to buy a home, so if they want to be emancipated they have to rent. In addition, current jobs mean that young people are not afraid to change cities and even countries, so they do not want permanent residence unless they already have great stability in their lives.
- There is a great demand for rent. In big cities, homes are rented in a single day. And also, most of the homes on offer are quite old.
- It will be a good way to have an extra monthly payment each month.
- You will have an easier time renting than selling. And if what you want is to obtain long-term profitability, this is your option.
If you have decided to invest in real estate to rent, take a look at our catalogue of newly renovated and modern homes available in the big cities.
Where is investing in housing more profitable?
We have already given a few touches on the most profitable areas to invest in… but now we will deal with them in more depth. In which Autonomous Community is it more profitable to invest to rent?
To answer your question of where to invest in housing, we recommend that it be in those areas where demand is greater than supply. As we have indicated, the areas of the periphery with more than 50,000 inhabitants are quite interesting because the purchase price is lower than in the centre of the city but the rent is not so low.
Better invest in apartments than in houses
Once you are clear that you want to invest to rent, now you have to decide whether to invest in apartments to rent or invest in houses to rent. What will you have to take into account when investing to rent?
- The first factor that you should seriously weigh when investing in apartments to rent is the money you will need.
- The second factor to take into account when investing in houses to rent is personal taste, that is, in this case, you are clear that you want to rent and not buy as your first home.
- The third factor to take into account when investing in apartments to rent is security.
One of the first things you must decide is to determine what budget you have in order to calculate your mortgage. This will help you decide the location of your home, the m2, etc.
The most important thing to opt for a flat or house is you have to think about the space you need, that is the square metres. A detached house is more expensive than an apartment, but it also has more metres. A townhouse will be cheaper but it has fewer meters. And a flat will be the cheapest option and with fewer metres.
Then you should think about another investment… in addition to calculating the mortgage expenses, you should take into account that if you choose a large home your monthly expenses are also higher because you will consume more electricity, if you want a pool you have to maintain it, etc.
This is where your tastes and needs come into play. If you like the bustle of the big city, living close to trendy bars and boutiques, then you would prefer to have less space in your home as long as you live in the centre.
But if, on the contrary, what you value most is peace of mind when you leave work, having a good garage space, and a garden… then your place is on the periphery. Then you have to think about whether you like to share community expenses with other people, meet neighbours, or not…
And also whether or not you travel by car every day. If you live in a townhouse or chalet, it is likely that you will have to drive anywhere.
As a general rule, an apartment in the centre of the city is less at risk than a chalet or townhouse in a peripheral area. Think that if you decide to invest in houses to rent, you will have to activate an alarm, put up fences, and take out home insurance… H3.
Before we leave, we are going to leave you some tips on investing in a real place:
- Decide if you want to invest in flats to rent or to sell. If you put it up for rent, you will have a fixed monthly income or only during the vacation period, depending on the modality you choose. During the vacation period, you can get a good income, but it will not be during all the months of the year.
If you finally decide to invest in a home to sell, you will have the risk of not knowing if you are going to sell it below market or if it will be profitable. But you will have a high financial income at once.
- Think about whether you want to invest in apartments or houses depending on what you want to do with them. If it is a house near the sea or in a big city, surely an apartment is more convenient for you. And if what you want is a long-term lease, it is convenient for you to be in a settled family that will surely want an elevator, garage space or swimming pool.
- Bet on a big city with great tourist activity to invest in housing that you later want to rent.
- As long as the house is in excellent condition. If necessary, it will be necessary for you to make a reform, since nobody will want to rent you the house if it is too old or in a terrible state.
- How do you know if you will be profitable? You will have to pay attention to the purchase price of the house, the taxes, and the expenses to set up the house… and from there you will be able to calculate the profitability of the house.
We hope we have helped you with this post to find out what is best for you when investing in housing.