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Home, land or commercial space? What is the best real estate investment?
If you have some money set aside and you think that it would be good to "multiply" them by an investment, surely the real estate is one of the options you are considering. Even if you have already decided to make such a purchase, things are not as simple as it seems at first glance, for the simple reason that the opportunities offered by this industry are very diverse.
How profitable are real estate investments?
Real estate assets are usually considered to be very attractive by investment specialists, but also by ordinary people, interested in business opportunities. Their advantage is that they are goods that maintain their value and integrity over time, while being supported by a solid demand - especially residential properties, which meet a basic need of the population (but not only). Depending on their specific characteristics, the homes on the domestic market offer a yield of between 5% and 7% per year on rent (long-term).
The benefits of investing in housing
As we have already said, housing is attractive to investors because it is in high demand, especially in big cities, both in terms of sales and rents. This means that an investment in a residential property can be capitalized in two major ways: either by long-term leasing or by reselling for profit, in the (shorter) term. In the current market context, the first option is preferred by most investors, because it is also the safest. Profit resale involves making a speculative purchase based on estimates of future home price developments. This allows for a higher profit in the short term, but also involves an increased risk.
The benefits of investing in land
Generally speaking, construction land is attractive because it is the basis of any real estate development. Especially in large cities, where there is a shortage of lots suitable for real estate projects, a well-positioned plot with a large enough area and favorable characteristics can be extremely attractive. From the point of view of small investors, the disadvantage of land is that it can be quite expensive, especially when it comes to larger areas, including in the suburbs of large cities. This means that this type of asset requires a larger inflow of capital, depending on the size of the property, while the time required for resale for profit cannot be easily estimated. In this context, for an investor with limited capital, the acquisition of a sufficient lot for the construction of a villa, in a real estate area under development and with access to utilities, can be considered the best investment solution in this segment of market.
The benefits of investing in commercial space
An alternative to buying a home can, of course, be the purchase of a commercial space, which can generate better rental income. This is all the more so as, against the background of the changes produced in the retail field by the COVID-19 pandemic, small shops tend to become attractive again, to the detriment of malls. However, the acquisition of a commercial space raises more difficulties for the potential investor, who must predict very well the success rate of the units that could operate in that space. From this point of view, the location plays a very important role, in correlation with the influx of potential customers, but also with the type of products / services attractive to the inhabitants of the area.
What would you choose? Home, land or commercial space?
If you have some money set aside and you think that it would be good to "multiply" them by an investment, surely the real estate is one of the options you are considering. Even if you have already decided to make such a purchase, things are not as simple as it seems at first glance, for the simple reason that the opportunities offered by this industry are very diverse.
How profitable are real estate investments?
Real estate assets are usually considered to be very attractive by investment specialists, but also by ordinary people, interested in business opportunities. Their advantage is that they are goods that maintain their value and integrity over time, while being supported by a solid demand - especially residential properties, which meet a basic need of the population (but not only). Depending on their specific characteristics, the homes on the domestic market offer a yield of between 5% and 7% per year on rent (long-term).
The benefits of investing in housing
As we have already said, housing is attractive to investors because it is in high demand, especially in big cities, both in terms of sales and rents. This means that an investment in a residential property can be capitalized in two major ways: either by long-term leasing or by reselling for profit, in the (shorter) term. In the current market context, the first option is preferred by most investors, because it is also the safest. Profit resale involves making a speculative purchase based on estimates of future home price developments. This allows for a higher profit in the short term, but also involves an increased risk.
The benefits of investing in land
Generally speaking, construction land is attractive because it is the basis of any real estate development. Especially in large cities, where there is a shortage of lots suitable for real estate projects, a well-positioned plot with a large enough area and favorable characteristics can be extremely attractive. From the point of view of small investors, the disadvantage of land is that it can be quite expensive, especially when it comes to larger areas, including in the suburbs of large cities. This means that this type of asset requires a larger inflow of capital, depending on the size of the property, while the time required for resale for profit cannot be easily estimated. In this context, for an investor with limited capital, the acquisition of a sufficient lot for the construction of a villa, in a real estate area under development and with access to utilities, can be considered the best investment solution in this segment of market.
The benefits of investing in commercial space
An alternative to buying a home can, of course, be the purchase of a commercial space, which can generate better rental income. This is all the more so as, against the background of the changes produced in the retail field by the COVID-19 pandemic, small shops tend to become attractive again, to the detriment of malls. However, the acquisition of a commercial space raises more difficulties for the potential investor, who must predict very well the success rate of the units that could operate in that space. From this point of view, the location plays a very important role, in correlation with the influx of potential customers, but also with the type of products / services attractive to the inhabitants of the area.
What would you choose? Home, land or commercial space?
