Real estate investment, like any type of investment, requires a knowledge base to be sure to get the best results. This is even more so if you decide to invest in Portugal.
Here are 10 tips and the right questions to ask yourself before making a real estate investment:
1. What is your objective as an investor?
Do you want to make a pure financial operation, i.e. to generate a profit on the resale of your property, after having carried out some renovations and thus limit the time your capital is tied up?
Would you rather generate a regular income over the long term and thus consider renting out your property
2. How long will or can you tie up your capital?
The money you will invest in Portugal in your property will not be available for a certain period of time. It is up to you to determine the duration carefully in order to avoid a temporary lack of cash flow.
3. Before you choose your real estate investment profile
Find out about the tax impacts that one type of investment may have compared to another. This is essential to avoid unpleasant surprises and maximize the return on investment.
4. Define precisely the profile of the property in which you wish to invest?
In particular with regard to :
The type of property
An apartment, a house, a commercial space, a studio, will not generate the same interest and therefore will not generate the same level of return.
The condition of the property
Buying a new property or a property to be renovated does not offer the same potential return. It will also be necessary to be very vigilant about the condition of the property and to be able to detect possible defects.
Location of the property
If it is located in the city centre, close to a green area, by the sea or close to public transport, the value of your property can vary greatly. It is up to you to evaluate all these parameters to judge the real added value to be put forward.
Amenities linked to your property
It is equipped with a swimming pool, with a terrace, with a parking lot, with a garage, with a lift, with a cellar and with a parking lot.
Some "extras" will greatly enhance the value of your property while others will be purely superfluous. So be careful not to pay for equipment that is not worth it.
5. Leave emotions aside
The primary goal of an investment is to generate a maximum return on the capital you will invest in it. From the moment you invest in Portugal, your focus should be solely on the financial prospects related to your real estate investment. All emotional considerations ("this property is not pretty" or "I couldn't live in it") should be banished.
6. Invest with a maximum of personal contribution
By financing your property mainly with your own funds, you will be able to recoup your investment all the more quickly and thus be able to use your profits to invest in new properties.
7. Multiply the visits before making your choice
This will allow you to have a very precise vision of the market situation and ensure that you make the right investment choice. Each visit gives you the opportunity to learn a little more and thus give you more chances to make a good deal.
8. Control the risks
In particular in the context of an investment of a property for rental purposes. Assess the risk of your apartment not being rented for a period of time.
9. Who will manage your property?
To invest in Portugal does not only mean finding the perfect property. In addition, you will need to find a competent and trustworthy company or person to save you any inconvenience. And these are charges that you will have to consider.
10. Diversify your investments
Follow the adage "don't put all your eggs in one basket". This practice will help you limit the financial risks associated with your investments.
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