When it comes to investing in property, it should be about securing your financial future and increasing your wealth.
However, many less experienced investors find themselves overwhelmed and a little intimidated by the process when it comes to purchasing property abroad. Our guide will cover the factors you should consider when making an investment, which many people overlook.
Type Of Property
Determining what type of property investment you wish to make before you begin may seem obvious, but it’s a step many investors make the mistake of forgetting when they are first starting out. Do you want a property that offers you income and capital growth without needing to stay at the property yourself?
Or would you prefer a holiday home for use by family and friends but only offers capital growth for the future?
When it comes to finding a suitable investment, there is no one size to fit all, and your priority should be to recognise what your objectives for investment are.
It is best to first look at your lifestyle requirements, timescales, and overall budget for this venture to understand your goals.
Suppose your goals are purely investment and not to use the property personally. In that case, it is essential to consider not only the purchase price and income returns but the capital growth of the property before you buy. If you are letting the property out for a variety of lease terms, familiarise yourself with the current laws in regards to letting to ensure you purchase a property that suits your requirements and circumstances.
Location
Whether you are purchasing a property for the investment opportunity or because you want a holiday home to enjoy with friends and family, it’s vital to consider the changes to the market when choosing the location for your investment.
Is this property going to be in a location you want to own in the next ten years?
Or will it be located in an area that is due for overdevelopment? Luxury property for sale in Costa Adeje is a trendy choice for property investors, boasting the perfect combination of opulence and privacy for any investment goals.
The location of your property will determine the overall success of your investment, affecting the amount of rent you will charge, your overall vacancy rates, and the types of renters applying to stay in your property.
The Abama Luxury properties for sale in Guia de Isora are in a highly desirable location offering the best return on your investment in the years to come.
Pricing
The most reliable strategy for property investing is focusing on price and the return you can expect on your investment.
You want a good value for your purchase so that you can expect the property value to rise over the long term. Still, as said in the point above, you need to choose the right location to ensure that values do rise and that the calibre of renters applying to stay in your property remains the same.
Suppose you purchase a luxury apartment with undisturbed views and glamorous amenities; you can expect the property to cost in the range of 550,000€ and upwards.
The long term rental return of a luxury property can be expected to range from 8,000€ and upwards per month, depending on the number of bedrooms and the type of amenities, such as jacuzzies, that your property can offer.
When you consider properties in less luxurious locations that are perhaps cheaper, are the expectations for rent the same? If not, it’s worth spending the extra money on a property you can enjoy for years to come that will yield profitable results from capital growth and rentals when not in use.
Land, Apartments, or Villas can perform differently over time; a plot of land will not provide any rental income but could appreciate in value more quickly if the purchased area is in a desirable location.
Investing in a property with fewer maintenance costs, such as an apartment in an area with higher rental yields, could be the right investment opportunity for you.
It is essential to research what properties and rental yields would suit your budget as well as your desired investment returns before you purchase a property, especially as some properties may be more expensive but off less opportunity for capital growth.
Quality Of Building
As with location, choosing a quality building that has been well constructed and designed will yield a higher investment return in the long term. Buildings of higher quality require less ongoing maintenance, repairs and renovation costs, but they also tend to rent out faster than older or low spec buildings; this, in turn, can drive a higher return investment.
How you decorate a property can add to subtract from the quality of the building as quality renters want a well-presented property with neutral tones, sleek designs and amenities in good condition; pristine and private beaches within walking distance are a bonus for any property.
The last thing you want is to attract a bad tenant, which can cause costs spent on your property to increase.
When the time comes to sell your property, you don’t want to have to spend a fortune bringing it to a higher quality. Keeping your property at a reasonable level will ensure that your asset is appealing to property investors and those looking to purchase a new home; this will maximise the price you can ask for when selling.
New Build or Off-Plan Properties
If you’re interested in buying a property that is currently in construction, then researching the track record and the proven quality of previous builds is a vital step to take. A competent developer is essential to the success of any real estate investment opportunity, and with any company, the experience of the developer will be the difference between the failure or success of a project.
It is important to ensure the proper due diligence has been completed when researching the builders and promotors while also looking into their financial stability and previous projects.
When interested in purchasing a plot within a luxury community where you have complete control over the design and construction process, companies like Abama Luxury Residences have years of experience and a portfolio you can trust.
Often people prefer to purchase new-builds that have been recently completed or are still on off-plan, but the previous investor has backed on due to a change in circumstances. This gives you the option, in many cases, to purchase a luxury property for less as you will have little control over the finished building.
Investors often purchase properties or plots at the early stages and sell the finished buildings to other investors or those looking for a less complicated process to creating their dream holiday homes.
Typically these properties or plots are priced lower than the average market value providing you with the perfect opportunity to maximise your capital growth.
Assuming the value of the property continues to increase during construction, by the time it is completed, it will have risen in value by a considerable amount; you can either sell it on for a substantial profit or continue to see a return on your investment through rentals. Securing a property at the earliest stages of a project is vital to ensure you can reserve the most sought-after plots at the best prices.
The post The Ultimate Guide To Tenerife Property Investment appeared first on Addicted to Property.