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Real Estate

How to take advantage of 5 real estate indicators when investing

If you are going to buy, sell, invest or simply rent a property; Real estate indicators can help you make better decisions. The word indicator may sound like a very technical and complex term; however, it is very easy to use it in the real estate market. Find out! 

What are real estate indicators?

Real estate indicators are processes or techniques; whose purpose is to measure the different elements and operations of the  real estate market.

For example, pricing, valuation and perception of the area, including the services it offers.

They are measurements that simulate scenarios of how the market is, generating expectations for decision making. They identify the best times to sell or buy; as well as measure the impact of public services and make an assessment of the quality of life offered by the area. 

What factors influence real estate indicators?

The elements that impact the real estate indicators are the interest rate, inflation and the exchange rate. 

  • Interest rate: It is the amount of money that is represented by a percentage for the different types of financing. In an easy and practical way is the use of money.
  • Inflation: In practical terms they are inflated prices; that is, a sustained increase in the prices of goods and services. 
  • Exchange rate : It is the relationship that exists between currencies; that is, how many coins of one is needed to obtain a different one or from another country. 

What real estate indicators should you consider if you want to rent, buy or sell a property? 

Identify your real needs and make decisions according to the following real estate indicators.

  • Capital gain
  • Price To Income
  • Time on Market (ToM)
  • Gross Rental Yield (RBA) 
  • Price To Rent (PToR).

Capital  gain is one of the best-known real estate indicators ; which manages to measure market expectations over a long period; as well as the yields generated. Goodwill considers the following factors:  

Quality of life and services offered by the area

The location is a fundamental element because it determines the socioeconomic level of the area; In addition, all the services that surround the area are added; educational, labor, supermarkets, health services and recreational spaces. 

Projection and urban infrastructure 

Another very important factor is to consider the economic dynamism of the area; as well as the opportunities they offer in commercial and work matters. If you are near an industrial or corporate park; increases the value of the place. 

Future projects regarding urban infrastructure are also considered; as well as new services of the place. Urban infrastructure encompasses electrical networks, drinking water systems, garbage collection services, and telecommunications, among others. 

The Cuauhtémoc City Hall had an increase of 105.00% per square meter thanks to all the educational offer, entertainment and transportation services. 

Public and private services 

Well-being entails having certain services such as: Shopping centers, places of cultural and entertainment interest, churches and hospitals. 

Another of the real estate indicators is the Price To Income, which helps you prepare a realistic budget, because it determines the number of years you must save to buy a property taking into account all your income. 

The Time on Market (ToM) allows you to measure the estimated waiting time before finalizing the purchase-sale operation. 

To know what is the right time to invest in a property; You can use other real estate indicators Gross Rental Profitability (RBA) and Price To Rent (PToR).

The Price to Rent allows you to know the number of years you need to acquire a property if you pay rent. The Gross Rental Profitability allows you to obtain an estimate to identify the profitability of a house or an apartment, in order to subsequently offer the property for rent. 

Recommendations to buy or invest in properties

Get your numbers right: Make a realistic budget and if you decide on some type of financing, identify your debt capacity; which should not exceed 30% of your total income. The ideal is to have savings to face unexpected payments. 

Analyze the properties with a magnifying glass: Request the advice of a real estate company to learn about the entire buying and selling process, including all the legal and administrative procedures that you must know to make a good investment. 

Walk around the area, discover all the services and amenities that surround it; as well as the age of the building, its conversation status and external factors such as security. 

Analyze financing: The best mortgage loan is the one that suits your personal finances. Thoroughly review the commissions, insurance, the fine print; but also the big one and ask if you have doubts. 

Slow decision making: Invest in your new home or simply acquire a property to build wealth; It implies searching, analyzing and verifying that everything is in order. Make decisions calmly to choose the best. 

Conclusions

The purpose of real estate indicators is to guide to achieve adequate decision making. They are measurements that help establish the time and money to know which are the best options to invest. 

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