The 3 most important requirements of a good investment home

Investing in real estate, increase your vemrogen exposure

Investing in real estate, increase your vemrogen exposure

You are a starting investor in the real estate market. You would like to buy your first or one of your first investment homes. What should you pay attention to, and when will you make a good purchase? We at Property Professional have 3 requirements when we invest in real estate and will share them with you.

Requirement 1: Always buy below market value

Investing in real estate is a reasonably good and stable investment, yet things can go wrong. It is and remains a risk you take. In order to cover the risks as well as possible, you should always buy your investment property below market value. If, for example, something happens that forces you to sell the property quickly, this will give you the financial scope to sell the property below market value and still break even. While if you had actually paid the price of the property, it is more likely that you would have made a loss of a few thousand euros.
In addition, by buying cheaper, you can also earn back your investment faster. Imagine buying a house with a market value of €200,0000 for this amount and renting it out for €1000 a month. While you can buy a similar house with a market value of €200,000 but for an amount of €170,000 and rent it out for €1,000 a month. With the second home you would have earned your money back sooner and if you had to sell the property quickly you would still make a profit if you sell it below market value.

Requirement 2 Investment property must be easily rentable

Property Professional is mainly looking for houses in the G4 cities, because these cities are attracting more and more people and there is sufficient demand for housing. As a result, the chance of vacancy is small and you are almost always assured of a high rental price. With this in mind, investing becomes reasonably safe. Because people always need a property, you can rent it out almost immediately, and if you should have to sell, chances are that someone will be willing to pay a price close to your asking price.

Requirement 3 A minimum net return of 5%

The gross return is calculated by dividing the rental income by the sales amount. But if you buy an investment property to let, all kinds of extra costs are involved, such as tax, maintenance, management and other costs. When you have made all these costs transparent, the investment home must yield a return of at least 5%. With this 5% you will have earned back the house in 20 years if you only rent it out. If it takes longer than 20 years, we think the investment home is a bit too risky.

What else should you look at when investing in real estate?

Of course, there are many other factors that play a role when you want to invest in an investment property. You can also consider a number of other factors for yourself when you buy a property. What is especially important is that you look at the business aspect when you buy an investment property, rather than being emotionally attached to it. Your aim is to increase your assets. As a result, it may sometimes be more convenient to sell the property rather than thinking that this gives you a special bond with the property.

Now that you know the 3 most important requirements of an investment home, you can start looking for a home that suits you. Have you no idea where to start looking? Let Property Professional help you.

We receive interesting investment homes every week. Please contact us and who knows, we may have an investment home ready for you.

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