The investment market has undergone a transformation, the interesting thing is that it is not seen as a threat, but as an opportunity to grow by betting on modern, efficient products with unique designs, capable of adapting to the current social contexts and needs, and to make the most of a real estate investment we share 10 key points to keep in mind.
1. Price, but also Quality
The first filter to be applied is price, taking into account indicators such as quality so that no significant costs are involved.
You don’t need to be a specialist in the area to detect any structural problems, for example, assessing the level of energy savings, sound insulation, the quality of furniture and electrical appliances, electrical wiring, circuit breakers, among other details.
It is ideal that before investing the developer has a model unit, so you can evaluate the finishes and materials that will be applied.
2. Future Assessment
It is important to proceed with a price comparison in the area, evaluate the value of the real estate units under construction and others in the same area already developed, from there determine the valuation variable taking into account that it should be subject to a differential order of 15% to 20% above the price under construction, in case it is below this percentage the unit is considered unsuitable for investment.
3. Consider Common Use Area Expenses
Many projects offer an endless number of amenities, which in many cases are of little use, the maintenance costs of these areas should be an aspect to consider, take into account that if your objective is to buy to rent in short or long term, high expenses can affect profitability.
4. Evaluates Common Spaces
A project with 4 to 5 levels of construction should have a common area surface of between 20% to 25%, i.e. a medium scale building with efficient design can significantly reduce maintenance costs.
5. Owned Open Areas VS Common Amenities
It is important to evaluate that the common use areas are necessary for outdoor activities, for example, the pool area, gym, tennis court, green spaces, etc., but without leaving aside the open spaces themselves, those exclusive areas, which, although the price is a little higher, will give you privileges.
6. Energy Efficiency = Sustainability
We must transform the way we consume energy, and beyond being a fashion is to transform our lifestyle, for example, evaluate if the communal areas use solar energy, rainwater recycling, 100% led lighting, spaces for bicycles and other similar attributes, this not only helps the planet, but reduces costs in reference to maintenance, also improves the future valuation of the property.
7. Transparency in Documentation
When you formalise the transaction , ask for a copy of all the documents that require your signature, so that you can read it with peace of mind, and if something is not entirely clear, you can validate it with your trusted lawyer. In case the project is developed under the law of trust, you must request that the document is validated by the same, and is not linked to the builder, developer or real estate.
8. Construction Times and Scales
Validate under your needs whether the project of your interest will be developed on a large, medium or small scale of construction, it is important to take into account that projects with a longer construction period usually have some disadvantages, mainly due to administrative costs or development times.
9. Use a Real Estate Agent
If you contact a real estate agent you can count on the support of knowing a wide variety of properties for sale that suit your needs, you must trust their judgement, and take into account that it is a typical operation that brokers intervene in the process of signing the contract and get a commission for the sale made.
In most cases real estate agents have a profit per sale associated with 5% or 7% of the value of the property, but it is important to emphasise that nowadays the prices of the developer or builder already have that fixed percentage of commission on the value of the property per sale. Do not fall into the typical game of considering that the price would be lower if you contact the developer or builder directly.
10. Investment Priced in Dollars
Your main objective is to ensure a good return on investment, and the best way is to subject the negotiation of both the down payment and the remaining balance in dollars, so that inflation will not impact your future payment projection.
An important point is to fix such an agreement in contract, establish the value of the asset and fix it in the currency of your convenience, considering dollars as the first option.
