Investing in apartments is one of the ways to invest your savings. How to prepare for it? Despite the increase in interest rates, is it still profitable to invest in real estate? What to do to make it profitable? Find out what mFinanse experts say about this.
Is it worth investing in real estate 2023?
There are many ways to invest in apartments. Each of them can be profitable, but not all of them may suit you.
How to start investing in real estate profitably:
- To begin with, you should think carefully about your business strategy, i.e. what you want to do with such a purchased property. If you are considering investing in an apartment for rent, think about who will be your future tenant. It is worth taking a look at what real estate in the city is rented, in what locations and to whom. Such an analysis will answer the question of whether it is worth investing in an apartment.
- Investing requires a plan. You need to know what you want to do with such an apartment in the near and long term. If the goal is to sell in a short time, but still at a profit, you should think about whether it is worth investing in real estate as part of house flipping.
How to invest in real estate – an apartment for rent
Renting is the most popular method. The advantages and disadvantages of this way of investing in apartments are actually different for each investor.
- For some, the disadvantage is the need to look for tenants from time to time or take care of the technical condition of the apartment.
- The advantages include a stable profit from renting.
If the apartment is rented all the time and the tenants send the amount agreed in the lease agreement, you can use the additional funds, for example, for part or all of the mortgage installment. This is an attractive option if you have decided to invest in real estate using not only your accumulated savings, but also financing from the bank.
Certainly, investing in an apartment for rent means that the property you buy should meet the expectations of future tenants. In the case of renting for students, it is about the proximity of universities and quick access to the city center. If you are thinking about working singles or young families, you need to pay more attention to the appropriate infrastructure of the building, e.g. whether there are elevators and a parking space assigned to the premises – these can be key features determining the return on investment.
Is it worth investing in apartments? House flipping – pros and cons
If investing in real estate means for you to buy an apartment, renovate it and sell it as quickly as possible at a profit, then house flipping also requires prior preparation. The advantages and disadvantages, as in the case of investing in an apartment for rent, vary depending on the investor.
- Undoubtedly, the advantage is the possibility of a larger one-time earning, unlike when renting.
- For some, the disadvantage of this solution is that investing in real estate requires verification of the legal status of the premises. Another aspect is to control the involvement of the construction team and the investment of your own funds before you can sell such an apartment further.
Investing your savings in real estate is a tempting option. It is also worth considering whether the purchase of the apartment should be partially covered by the mortgage loan.