In this article, you will learn everything you need to know about real estate projects and what to consider before making an investment.
Introduction
Investing in real estate has been one of the main strategies used by investors throughout history; since it is one of the best ways to protect a capital from the regular fluctuations of the economy, however the current panorama has made investing in real estate projects not seem to be the most sensible option.
If the state of the real estate market these days, it is clear that the current trend is downward: the confinement measures established by governments globally, as well as the massive job shortage caused by the covid-19 pandemic, a caused that real estate, especially warehouses, offices and commercial premises, have had difficulty in standing; This in turn caused a massive increase in the number of properties of this type for sale, which affected their price, decreasing them exponentially due to the large supply.
In the case of Colombia, this reality has greatly affected our real estate economy in terms of offices and businesses, even more so now that new forms of work have been established to maintain the economy (such as the “home office”), It is estimated that the demand for this type of property will remain low for a period of at least one more year, although this will depend on how the world panorama develops.
However, when it comes to residential and rental properties, the situation is somewhat different. Although it is true that the lack of employment has also affected this sector, there are those who see the downward trend as an investment opportunity in the future. It is for this reason that below we will tell you everything you need to know about the development of real estate projects today, and what you have to do to ensure that your investment generates benefits in the future.
What is a real estate investment?
As we already mentioned, within the world of investments, real estate investment is perhaps one of the oldest carried out by man, and it is that, if done with the necessary knowledge, it can become the best way to protect and do grow your capital.
But what is a real estate investment? From the first moment you should know that there are several types of this investment, but that they have the same objective in common (like any other type of investment) and that is to always seek to generate profitability to all those real estate in which we invite .
It can be summarized that there are three main types of real estate investments: Investment for capital growth, Investments for cash benefit perception, Investments for personal or commercial use, these three types of investments apply to all types of real estate, but in this article we we will focus mainly on housing. The definition of these types of investment would be as follows:
Investment for capital growth.
They are all those investments that are made in order to sell the property in the future in order to generate profits, the famous “sell to buy.” To make this type of investment you must be quite meticulous, since you must know the market well to obtain the expected profit.
In this sense, factors such as the location of the property, the services it has access to, the buildings near it (shopping centers, schools, hospitals, among others) as well as the land available for possible construction must be taken into account. of other real estate projects; All these factors are what will increase the value of your property in the future and will make you perceive a profit.
In addition to this, you must be attentive to the development of the real estate market, to ensure that you buy at the right time (at low cost) and sell when the market value has grown.
Investments for the perception of cash benefits.
Likewise, another type of investment that is quite common is that made with the purpose of renting a property instead of selling it. To make this type of investment you have to be attentive to all the aspects that were mentioned in the previous point, since it will not only depend on whether you can sell it at a good price in the distant future, but will also increase the possibility that this is rented constantly or for a long period.
Likewise, it cannot be said that this investment is better than the previous one, since each one has its pros and cons; Investments for cash perception is useful in that it allows you to receive constant monetary benefit over a long period of time, while the capital invested in the property remains intact.
In addition to that, it must be taken into account that to invest in real estate for the purpose of renting you must know the maintenance costs very well, so that you adjust the rental price and do not generate losses.
Investments for personal or commercial use.
Finally, we have the case in which an investment is made in order to give it a use, either temporary or prolonged, or even partially. What is expected of this type of investment is not only to obtain personal benefit, but to get the best out of our property at all times.
For example, if you bought an office for your business but for some reason the space is being larger than you need, you can opt for the option of renting that space that is not being used; Many companies today have had to resort to this strategy after their production has been reduced by the global pandemic and they have cut staff.
Similarly, something similar happens with homes located in areas near the sea or located in tourist areas, since the owners of this type of property do not usually make use of them for much of the year, so while it is unoccupied They decide to rent it and thus obtain money while helping to pay the maintenance costs of the house.
Real estate investments today:
Having known the types of real estate investments, a question now arises: Is it appropriate to invest in real estate projects today? And if so, which strategy is the best for me? To answer these questions, let’s first define some aspects that define a good investment:
What characterizes a good investment?
Making a good investment is always the main goal of anyone looking to invest their capital, and this translates into the greatest return on investment in relation to the capital invested. Anyone who puts their capital and their trust in a project or business model hopes to be able to perceive a benefit in the future, without having to risk too much in the process.
In this sense, there are some who would define the characteristics of a good investment with the following aspects:
Obtaining the greatest benefit.
That the capital to be invested is reasonable and adequate to the projections and current reality of the project.
Obtaining the benefits as soon as possible (depending on the business model or project).
However, these aspects can become somewhat subjective, since in some investments the greatest benefits are not perceived in the short term, but until the medium or long term. For this reason, it is better to understand a good investment as the relationship between the expectations and needs of the investor, their satisfaction and the risk that is run when making an injection of capital.
If a project does not meet your expectations (whether in the short, medium or long term) according to your needs and if, in addition, the capital you are investing is not multiplied, perhaps that investment is not the right one for you. Likewise, if you want to make an investment but it has a high risk of failure (those that depend on chance and external factors that cannot be controlled), perhaps the best option is to give up.
Invest in real estate projects today.
Knowing these previous aspects we can know with greater security if a real estate investment is currently a good option. As already mentioned, the current real estate market is trending downward. What does this imply? What due to the large supply and low demand caused by the current situation the price of the properties has decreased considerably.
However, there is a sector within this type of investment in which a very good business opportunity can be seen: the tourist regions. Tourist cities have always been part of the main places that investors turn to when investing in a real estate project.
This is due to the multiple benefits that a home on the beach offers compared to one in the city. In general, this type of home generates greater capital gains, since it can be rented while the owner is not using it, making it receive a constant cash flow, especially in times of tourism. In addition, the price of this type of property does not depreciate that much, in fact, it tends to increase, and to sell with relative ease in case its owner requires liquidity quickly.
However, as in other types of investment, the price of this type of property fell during the last year; however, with the arrival of the vaccine and the “new normal”, exponential growth is estimated in this market.
This reality has attracted many investors who want to take advantage of this opportunity to invest in real estate projects with a relatively low injection of capital and to be able to obtain great benefits once the value of these properties increases.
In addition to that, the inflammation that our country is going through has also been affected by the global situation, as in other countries in the region, making this perhaps the best time to invest, since that way we will also be protecting our depreciation capital, while we will be working in turn for its growth.
In the same way, it is important that you know that not all investment projects will be indicated for you, as we mentioned above, it is important to make an analysis of the complete picture, for that reason and to avoid falling into a bad investment now we will tell you some aspects that you should take into account before investing:
What should I keep in mind when investing in the current scenario?
The ubication
From the first moment, and as in any other investment in real estate projects, it is vital to know all the details about its location. Apart from the data that we already mentioned about the purchase of a property (such as its proximity to shopping centers and services such as hospitals, schools, among others) in these cases you should know if it is also close to the beaches or emblematic places of the town, since that this will also add value to the home.
Safety
Naturally, investing in an area that is safe is vital, since it will not only allow you to be calm when you are in the property, since you will be protecting your well-being and that of yours, but this will add value when renting or renting. The building.
Tourism in the region
In the case of Colombia, acquiring a property on our Caribbean coast is a dream come true, but thinking strategically, you should try to do so, it is a city with a growing economy that ensures 100% stability in the value of its properties.
For this reason, it is important to instruct about the tourist flow of the city in which you plan to invest, since generally these cities maintain an economic status and balance over time, and also that in the coming years their economy will have that Expected exponential growth.
The price
Although you already know that it is currently possible to invest in a low-cost real estate project, you should always think about the relationship between the invested capital and the benefits that the property will give you, and for this it is essential that you Make sure that the money required to make the purchase is in accordance with the capital gain of the place, do not buy something just because it is “cheap”, do it because that investment will bring you real benefits.
If you follow these tips, and put into practice the information you learned here, it is certain that you will be able to make a good investment, which will generate the monetary benefits you expect.
Conclution
After having made all this long journey, it is evident that the important thing to make a good real estate investment is to study the market and the type of real estate project in which you want to invest, since, as in the case of real estate located in areas Tourism such as Cartagena, Barranquilla and Santa Marta for example, it is estimated that in a relatively short period the value of this market will grow exponentially and maintain this upward trend for many years.
Likewise, remember that investing in a house is not only a fully economic operation, but by doing so you are also investing in your stability and that of your family, investing in a place where you will create memories and memories that will last for a long time. forever.
The key to investing is to meticulously study all the pros and cons of an investment, so that it adapts to your needs and expectations, thus allowing you to achieve the benefits you expect.
Use all the information that you obtained here and considered before making your next investment. We at Bondi Beach are currently developing several real estate projects throughout the Colombian Caribbean coast area, which stand out for their excellent location, avant-garde design and the highest quality that will maintain the value of your property throughout the years; We invite you to browse our website a little more and discover all that our work can offer you.
Metroblock, the company that builds our Bondi Beach real estate project, is recognized on the Caribbean coast with more than 25 years of experience in the development of construction materials and present in the most important projects throughout the Caribbean coast; He is also one of our partners in the construction of Bondi Beach. GPSMarketing company in charge of the Marketing and sales department.
