REAL ESTATE – INVESTMENT – MARBELLA – Buy to rent or to sell?

Buy to rent or to sell?

Obtaining profitability through a property is one of the most common options among private investors. Housing has always been a refuge value, even in this era marked by the pandemic.

For this reason, today we want to present two cases to be able to invest: buy and then rent or buy and then sell. In Marbella WOHNEN we explain the two options so that you can decide which is the best option.

Buy then rent

Acquiring a property to put it up for rent is one of the most common investments. According to data from the Bank of Spain, the total annual profitability of a home (rent plus price variation) stood at 5.2% in 2020, compared to 7.4% in 2019 and 10.6% in 2018.

Therefore, the home remains an asset on which to continue to make a profit.

The reasons for buying and then renting:

• The current economic situation and the impossibility of accessing a home for many have made the rental option gain prominence.
• Regular monthly income: if a tenant is found who pays the rents rigorously, a guaranteed monthly amount will be available. The downside is that the capital invested in the purchase will take years to recover.
• Renting a home is usually faster than selling: if it is an area with high demand and if the property is in good condition, it is possible to rent it in a short time.

Buy then sell

The most common way is usually to buy the house, reform it and sell it. In this regard, industry estimates calculate between 15% and 20% average profitability with this operation. So it can be a great option for anyone who wants to make an investment and get a good return in a short time.

The advantages of this great alternative are the following:

• Greater ability to acquire a property at a good price: acquiring an old property or in poor condition will give greater negotiating power when acquiring it.
• It is not necessary to carry out large works: fixing small flaws or painting the house will serve to increase the value of the property. However, there are some actions that could help to revalue the property to a greater extent and obtain greater profitability: adapting the distribution of the house to current needs, updating kitchen and bathrooms, improving its energy efficiency, among others.
• The benefits are perceived in the short term: since the demand for this renovated property will be higher, especially if it is located in central areas, there will be greater possibilities of adding additional value to its final price.

Which option is better?

The answer will depend on your needs. However, the purchase of a property and then putting it up for sale generates income immediately and having a rental means having a sustained monthly income over time that in the end could be a higher amount than you have taken for the sale.

But, whichever option you choose, real estate investment is always profitable. That if, if it is well done. If you have never invested or simply need someone to accompany you in this task? At Marbella WOHNEN we are experts in getting the investment that suits you best.

As in everything, the magic formula does not exist

But the best way is to be informed and nothing better to be up to date in real estate investment.

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