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Real Estate Investment Analysis: Types of Real Estate Investment

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Investing in real estate is one of the oldest activities known to mankind and, therefore, one of the most developed and complex. Despite its vital importance, not all have the basic and necessary knowledge to function adequately in the real estate market. And thus obtain a property that ensures personal development and satisfaction, as well as generating material benefits. Most of us are not even aware of the real estate investment groups.

When we talk about a real estate investment analysis, we refer to the generation of profitability. Real Estate Investment Analysis is the same that implies the relationship between the benefits provided by a certain operation and the investment or effort made-usually expressed in percentages.

In the world of real estate investments, there are classes that are clear. Each one has its own different rules, conditions, and processes.

The central idea of ​​each of these ways of obtaining financial return is the following:

·         Capital Gain: Buy To Sell

·         Cash Flow: Buy To Rent

 

Real Estate Investment Analysis: what is Capital Gain

Capital gain means that from the moment we acquire a real estate asset for the investment, we have to buy below the market price. So when we sell it, we always win. Even if the country's economy is unstable, we win, and will not lose.

On the other hand, we must also bear in mind that the value of a property increases as time passes. Some properties increase in value faster and in greater volume than other properties. The key to being a successful investor is precisely understanding and knowing when to buy a property.

For example, if it is a property located adjacent to a place where a commercial or financial center will be developed, the property will increase in value simply. because it is adjacent to the project. In this way, we see how a property increases its value generating capital gains without the necessary intervention of the owner.

Do not forget THE REAL ESTATE BUSINESS is in buying, NOT when selling.

Real Estate Investment Analysis: what is a cash flow?

Cash flow means that the property must generate income obtained from the rental of the property. And even more, if it were a Free Cash Flow. This represents the cash available once all the investments have been made in the fixed assets and in the working capital necessary to carry out the operations necessary to develop a real estate project. This must be sufficient to cover the maintenance and other expenses required by the administration of the property and still produce profitability for the investor.

When we talk about Cash Flow, we are talking about obtaining good rents. This means that we can live on our income by renting our properties.

 

Welcome to a fascinating world full of opportunities!

Real Estate Investment Groups entail knowledge of different disciplines, such as administration, architecture, law, finance, market studies, among others. This requires a detailed Real Estate Investment Analysis regarding the economic potential of the asset. The key is to maximize the speed and volume of sales. 

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As real estate investment property specialists, we can guarantee you an objective vision and guarantee a positive experience. It is not about buying a property because we think it is cheap, nor about eternally waiting for an opportunity that never comes or, even worse, wasting precious time and letting prices rise.

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