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Real Estate

How to invest in real estate developments: 5 great tips

Do you want to make investments safely and profitably? Find out if it is a good idea to invest in real estate developments and how to do it. 

Benefits of investing in real estate developments

When you invest in real estate developments you get different benefits: 

  • A safe investment with better returns than savings instruments; which are characterized by low interest and subject to commissions, inflation and other variables. 
  • A heritage that can guarantee your retirement plan . It is an asset that can generate an increase over time based on projects developed in the area where you acquire your next home
  • A stable investment without unexpected surprises such as stocks or metals that are affected by various macroeconomic variables, since prices are conditioned in dollars and influenced by the fluctuation of the Mexican peso; In addition, if you want to invest in the stock market, you will have to learn and manage a conservative profile at first to avoid losses of your capital, while you know how they work. 
  • An inheritable investment , even if you initially obtain your home through mortgage loans , is an asset that supports the financing and a good start to increase family well-being with financial peace of mind.   

What is real estate? 

It is first important to define what real estate is and its classification, before telling you how to invest in real estate developments

Real estate is property, that is, it is the union to the ground in a physical and legal way. It does not allow you to transfer due to its characteristics and its classification is as follows: 

  1. Residential : Includes all condominiums, houses and undeveloped land.
  2. Commercial : These are spaces intended for uses such as offices, shops and/or warehouses. 
  3. Industrial : These are places like factories or mines. 

How to invest in real estate developments 

Follow these 5 great tips that we give you at TrueHome to invest in real estate developments.

  1. Identify the use of the property
  2. Know the added value of the area
  3. Investigate road access, connectivity and amenities
  4. Create an investment plan
  5. Buy in pre-sale  

1.- Identifies the use of the property. Why do you want to buy the house? rent it, re-sell it? Based on your answers, consider the cities and colonies. The set of amenities that each location has, whether it is a tourist destination or you prefer a modern city with nearby schools and hospitals.

It is important that you investigate about the projects that are developed in the area because it increases the added value of the place. 

2.- Know the added value of the area. When you define the objective of the property then you will be able to determine which areas will be the most suitable to meet your goal. An important and decisive element to acquire housing is the surplus value. 

The capital gain is the difference between the purchase price and the sale price. It can increase its value with respect to the urban development plan for schools, hospitals, connectivity and road accessibility. The key question is how much will it cost to sell the property in the next few years? 

Items considered in capital gains 

One of the essential points to take into account when it comes to investing in real estate developments is capital gains, so take into account the following elements.

  • Price cycle: Check the prices of homes in the area, they can go up or down depending on the conditions of the place: If there is an urban development plan then the value increases or otherwise, when there are no improvements in the place, the surplus value stays the same or can even go down. 
  • Market demand: When new investments such as shopping centers or public services are implemented, it is an engine that drives the value of homes. 
  • New property: It is an attractive home because it is governed by updated rules and regulations, providing you with better benefits such as sustainable technology.

However, if you want to ensure a good result when investing in real estate developments, look for a real estate agent to explain the entire process with qualitative indicators such as the internal rate of return (IRR), the net present value (NPV) or the interest rate. capitalization and guarantee your money with better profits. 

3.- Investigate road access, connectivity and amenities: Currently connectivity is like having a refrigerator at home or electricity, it raises the added value of the area. Know the routes to the main avenues, the transportation system, schools, tourist destinations, hospitals, shopping centers and entertainment venues near the home.

4.- Prepare an investment plan: What is the amount and use for housing. Set clear goals and consider long-term times; it avoids impulses and eliminates decision making based on feelings of “ this space has good vibes, I buy it”. Respect your plan and you will feel the best vibes when you feel completely calm for abiding by the initial plan. Remember that plan B is an adjustment that can be omitted if you have a planning with qualitative elements from the beginning. 

TrueHome Fact: Acquiring real estate is an investment with a long-term strategy. Do not rush or take shortcuts, research different options and think about the objective of your investment. 

5.-Pre-sale purchase: 

Buying pre-sale houses and apartments brings you several benefits: It allows you to choose the property you like best with the finishes you prefer; but the most important thing is the savings you will get by buying a home at a lower cost; which ensures a greater return on investment due to the increase in value as the construction period progresses and the growing popularity of the real estate. 

Conclusions: 

It is not an added value, it is a basic requirement that you must consider, being accompanied by a real estate agent. It makes your way easier by explaining the entire process with transparency, in addition to establishing a well-prepared investment plan; contemplating qualitative data that guide you and direct the fulfillment of your objectives for a good long-term investment. 

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