Is investing in real estate the right step to take in this period? Understanding whether buying a house to rent out is the right opportunity to earn is essential.
WHY FOCUS ON INCOME-PRODUCING PROPERTIES?
Today it is convenient to focus on income-producing properties, i.e. buying a house and renting it out. There are various conditions for which buying a property is suitable, and in detail, they are:
- Economic crisis: following Covid-19, more people have more need to sell.
- Rising rents: rental prices are rising, and rents are reasonable and will continue to be so in the future.
- Prices are low: real estate prices have yet to recover from the crisis and the real estate bubble, and the market is full of excellent opportunities, except for large cities.
- Interest rates are at an all-time low: getting the accounts right regarding taxes is necessary, but it is also essential for those who buy with a mortgage to consider interest.
IS IT BETTER TO BUY WITH A MORTGAGE AND INVEST IN REAL ESTATE?
Every real estate agent will surely advise you on buying a home, but it’s crucial to consider your debt ratio before doing so. The rates are meagre, but this does not mean it is convenient to buy a house with 80% of the capital, which the bank contributes through a loan.
The interest on the sum must be taken into account, which can be low, but it is one factor that reduces your possibility of having an adequate income for your real estate investment. Therefore it is essential to consider the loan’s costs and the interest.
INVESTING IN PROPERTIES TO RENT?
It is essential to understand how to monetize a real estate investment, where it is convenient to buy a house to rent it.
RENT TO STUDENTS
An annuity possibility could be renting to students who move to another city for work or study reasons. Renting a room generates more income, although certainly there are times when the rooms could remain empty, especially during the summer or holidays.
Renting to students is an excellent opportunity, mainly when the buildings are located near university facilities.
INVESTING IN REAL ESTATE: RENTALS TO TOURISTS FOR SHORT PERIODS
Another possibility that generates income could be purchasing a house and then renting it to tourists; in particular, we are referring to cities that live for tourism. For example, those where there is the sea.
In this sector, rents yield much more, especially in the summer months, which is why it is very convenient to invest in real estate. But, indeed, indeed, precisely for this reason, it must be considered that they cannot always guarantee maximum occupancy.