Investment in a property, also known as an investment in brick, is one of the best known in the world. In national terms, the real estate market has reactivated strongly after the pandemic. The sale of homes continues to rise in the first months of 2022, while real estate investment in Spain has grown by more than 30% last year.
According to experts, properties will continue to be a good value in 2022 instead of stock market instability. For this reason, we dedicate this article to answering the most frequently asked questions, such as what is real estate investment or if it is profitable to invest all your savings in a property.
What is real estate investment?
There are different types of investments. Financial investments are made in securities such as shares, stock markets, currencies, raw materials or real estate. This last type of investment allows the investor to generate profits or passive income through the rental or resale of the property at a higher price.
When it comes to investing in real estate, there are endless options. The easiest, by far, is to buy a flat or single-family property, rent it out, and monthly obtain rent while waiting for its value to rise enough to make a big profit by selling the property.
The key to profitable investment in 2022 is pre-purchase research. To find out what type of property is the most suitable for your investment, you should study the location, the properties for sale, the state of the property, the qualities it has, the age of the building, the services provided by the area, as well as the possibilities that this will have in the future.
Is it profitable to invest in property?
The short answer is yes. Investments in real estate have been considered one of the best options for a long time because they do not lose their value, unlike stock markets or currencies, for example. Real estate appreciates over time and allows owners or investors to earn additional passive income. In the following list, we classify some of the most important reasons to invest in real estate.
A steady stream of income. As we have already mentioned, if you rent out the space you have invested in, you will receive monthly earnings from the tenants. You can opt for a long-term rental or, on the contrary, benefit from a vacation rental due to its high profitability.
Great long-term return. If the real estate you own increases in value over time, selling it would bring you a great return on investment.
Inflation protection. In times of high inflation, when the prices of goods and services increase, investing in a property is considered protection against inflation since the value of homes and rents, increases in the same way as the rest of the services.
Second residence. As an owner of the property, you can always use it as a second residence if you wish.
What types of real estate investment exist?
Real estate encompasses all property or real estate assets that can be rented or sold to generate a return or a capital increase. There are different types of real estate in which you can invest. The main types are:
Residential properties are multifamily or single-family residences such as studios, apartments, flats, penthouses, duplexes, houses or villas. In this category, we also include developable land, as well as parking spaces and storage rooms.
Commercial Properties. These investment assets are entire buildings or premises with commercial functions such as offices, shopping malls, warehouses, retail or wholesale stores, or hotels.
Industrial properties are real estate with a productive purpose, such as farms or factories.
Why invest in a property on the Costa del Sol?
Undoubtedly, Spain and especially the Costa del Sol enjoy an excellent international reputation. Many Spaniards and foreigners choose this destination not only for their vacations but also to invest.
The Costa del Sol tops the list as one of the most popular places for its tourist, cultural and gastronomic offers with many leisure options, excellent Mediterranean beaches, the climate and a relaxed outdoor lifestyle.
Málaga Capital, Costa Este or Marbella, Fuengirola, Benalmádena, Estepona or Benahavís are just a small part of the coastal municipalities ideal for real estate investment.
