How to invest profitably in the midst of property construction recovery

How to invest profitably in the midst of property construction recovery

Real estate market is recovering at a good pace after a sharp drop caused by the consequences of the pandemic. After months of "paralysis" caused by restrictions, the desire to buy property has spurred deals. In May this year, the number of transactions increased by a historic 107% over last year, and demand is expected to remain very strong.

How to invest profitably in the midst of property construction recovery? Let us take a look at some tips.

1. Planning and identifying opportunities

There are a lot of offers and it is recommended to clearly define what you are looking for. Buying your first house is not the same as moving to another house or investing in rent or sale. According to the Bank of Spain, the 12-months rental yield is 3.68%. Buying a new house is also no different from buying a secondary one. Anyway, planning ahead is the key.

2. Training in negotiation

When it comes to set the purchase price of a house, the art of negotiation comes into play. Personal finance expert Alfio Bardolla argues that negotiation “is getting better with experience” and believes that the fundamental piece of advice when evaluating real estate is that “you should never call the price first.” He explains that the same property can cost differently depending on whether you buy or sell, and the final amount will depend on your negotiating ability.

3. Buy at a discount

This is one of the golden rules of real estate investing, according to Alfio Bardolla, who notes that according to a recent study, more than 25% of houses in Spain are 30% below their real value.

4. Objectivity despite preference

It often happens that people find property that they like very much, and therefore, objectivity is lost regarding the profitability of an investment opportunity. All private investors face this problem. However, when investing in real estate, you should be as objective as possible and choose the property that will ultimately bring the greatest profit.

5. Follow the luxury property market

The premium property market has been less affected by the pandemic, and forecasts for this and next year predict the growth thanks to the success of vaccination campaigns. According to Emiliano Bermúdez, Deputy Director General of DonPiso, luxury property is expected to rise by 3% in 2021. He assures that Madrid and Barcelona are among the best cities in the world to invest in this segment, “a sector that will face increased demand from foreign citizens in summer.”

6. Market Pulse

Real estate sector has weathered the pandemic crisis better than other industries. Ferran Font, director of Studies at Pisos.com emphasizes that “the recovery in the real estate sector continues to be confirmed month after month,” although he acknowledges that this trend will continue due to the development of a new wave of coronavirus.

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