Profitability is the benefit that is obtained from an investment, it is the ratio of gains or losses obtained on the amount invested. This profitability is obtained through the following formula:
Profitability = (Profit or Profit / Investment) * 100.
The average gross return offered by a rental is 4.4% per annum, in addition to the 12-month revaluation this amounts to 8.8%, according to data published by the Bank of Spain. In Barcelona this figure is higher, since it amounts to 5.64% and a year exceeds 10%, hence the importance of investing in Barcelona.
It is possible to obtain a high profitability of up to 20%with complete security in real estate investment, but we must take into account two very important elements before investing in houses:
The main thing to obtain real estate profitability consists of:
– Locate the demand consistent with time.
– Real estate products must be adapted to their target audience, that is, adjust to the potential level of the clients. Choose the type of property well.
– Negotiate the price as much as possible.
– As investors we must reject those flats that are located on the outskirts and that have large discounts. Profitability is found in large cities that generate very high annual returns.
– Hire insurance to avoid defaults and long periods without renting.
– Work with several agencies that work properly and secure tenants quickly.
The low profitability of bank deposits, the boom in the rental market and investment funds make real estate rental destinations very interesting to be able to invest.
The prices of housing for sale fall steadily and it is expected to continue like this for a long time, but at the same time the rent remains. This is due to the fact that access to bank loans is becoming more difficult and rental housing is opted for, thus opting for the “buy for rent” to make the investment of the home profitable.
In Madrid and Catalonia is where the highest rate of real estate rental market is concentrated, these two communities represent 43% of all the activity with respect to Spain.
Are you interested to make a real estate investment in Sitges? Do you want to buy something that will provide you a benefit and also offer you the opportunity to enjoy it a few weeks per year? Sea Sun Invest is your solution!