Investing in real estate abroad is actually a great investment option. It is relatively safe and beneficial. But many people have a lot of questions about investing in real estate, which will be discussed further.
Top 5 Common Questions and Answers About Investing in Real Estate Abroad:
1. How much money do you need
Investing in residential real estate is one of the most popular investment options. It is profitable and relatively reliable. At the same time, there is no need to deeply understand the field of finance, because this is not the stock market.
The downside is that such an investment is not suitable for everyone, since a deposit requires a lot of money. It is impossible to determine the exact amount. Firstly, it depends on the specific region, because it is known that housing in a large city is more expensive than in the provinces.
Secondly, the amount of the contribution depends on the property itself. You can buy a large apartment in the city center with a major overhaul for tens of thousands of euros. It is also possible to purchase a studio apartment on the outskirts near the cemeteries for a relatively small price.
But we can definitely say that for a more or less successful investment, you need to have from 25,000 euros.
Another important point is liquidity. The success of the deposit depends on how much the real estate will be in demand now and in the future.
2. What is the payback
Payback and profitability, as already mentioned, depends on the demand for housing. Income comes from rent. Also, the object itself over the years can noticeably rise in price. It turns out that in order to obtain a stable income, it is required to rent housing continuously, that is, without long downtime. In order to be able to rent a property constantly at a fair price, it must be of interest to potential tenants.
Investing in residential real estate is actually profitable. For example, a one-room apartment in Bulgaria costs 25 - 35,000 euros on average. Renting such housing costs about 250 - 350 euros per month. Under the condition of continuous delivery of housing for 10 years, the apartment will already pay off. The yield is approximately 10% per year.
And that is not all. The fact is that over the years, the price of real estate and the rental rate can grow. Accordingly, the potential profitability will be even higher. If the price of housing and the rental rate grow by 1% per year, then 10 years after the investment, the apartment will cost almost 40,000. And due to the rental income for 10 years, the investor will receive a much larger amount.
If the investor sells the property, the total income will be 10,000 euros. Considering that initially the apartment was bought for 25 - 30,000 euros, then over 10 years the return on investment was almost 100%. And all this is absolutely passive.
3. What property to buy
It is better for novice investors not to try to invest in land plots and commercial real estate at first. It is better to choose a liquid apartment for investment. A good option is a one-room, two-room or studio apartment in a large growing city. It is important to consider the location and availability of communications. It is necessary to invest in the housing that the investor himself would be happy to buy for himself.
4. What are the risks
The chances of property prices falling over the years are extremely low. Even if the object has not noticeably risen in price, the investor will still be in the black, as he receives passive income from rent.
5. Is it worth getting a mortgage
There is a mortgage option for buying a home. Moreover, real estate is not considered as a place of residence, namely as an object for investment. The calculation is that housing will rise in price over the years. And repayment of the mortgage comes from the profit from the rent.
It is difficult to answer the question unambiguously. It is worth remembering that a mortgage often leads to a large final interest overpayment. And often the monthly rental income is not enough to cover the loan payment.
To issue a mortgage or not is everyone's business. Here it is necessary to first correctly calculate everything and only then make a decision.
Instead of output
When investing in real estate, remember to choose the right object. If housing is not interesting to other people, then it will be difficult to find a tenant and a buyer in the future.