Investing in real estate can be easy. But it can also be very time consuming. Many people want to buy for several years, but never end up making it happen. Others invest, get indebted and end up regretting it.
Do not worry, in this article we give you the 9 tips to invest in real estate easily:
1. Work with several agencies
Working with multiple agencies and communicating this openly provides healthy competition. It supports your willingness to buy and each agency will work hard to make sure you don't sign with the competition. This will give you more properties to compare.
2. Test the market
If you want to invest in rental properties, one of the risks is vacancy. To avoid this, you can post a "test" property on real-estate portals. This property must have the same characteristics as the one you want to buy.
You will quickly see if the risk of rental vacancy at the price you are offering is high or not.
3. Make sure you have listed all the costs
It happens very often that some costs are not taken into account, which can greatly reduce the profitability of your investment.
Here is a list of purchase costs that you should not forget: Total cost of the bank loan, cost of the loan insurance, agency fees, property transfer taxes, notary fees, maintenance reserve, furnishings and appliances, other brokerage fees.
4. Look at the rental tension
Rental tension is an indicator that represents the demand for rent in a given area for a certain type of property. If the rental tension is high, you will have no problem finding tenants. If it is not, the risk of rental vacancies may be high.
5. Plan for maintenance
Problems with the pipes, breakdown of the washing machine, repainting the walls, changing the locks. During the life of an apartment, various renovations are necessary. Plan for this budget to stay comfortable with your investment. We recommend having 3% of the price of the property in reserve.
6. Look for points of interest (subway, school)
Certain points of interest are favorable to a high demand. This will allow you to obtain a good profitability, capital appreciation and avoid rental vacancy. Among these points of interest are public transportation stations, schools, shopping areas.
7. Be reasonable about the renovations
It can be tempting to go for cheaper properties that need a lot of renovations. In 80% of the cases, renovations will end up being much longer and more expensive than expected. If you still want to position yourself, plan for 30% more budget than what has been proposed to you and twice as much time.
8. Negotiate reasonably when you buy
On most properties, you can usually negotiate between 2% and 8% of the purchase price. To negotiate, be aware of the stage of the sale. Are there already interested parties? Have there been many visits already? Is the seller in a hurry? Why does he want to sell? It is important to make a proposal that is adapted to the situation. An overly aggressive proposal can cause you to miss an opportunity. A counter offer at the right price will save you time and money.
9. Start from €100 with tokenized real estate
Starting out by investing alone can be very capital demanding. At Equito, we allow you to invest in fractions of tokenized real estate starting at €100. This allows you to start building your capital in minutes and without having to go into debt.