What are the most and least profitable real estate investments?
Before investing a certain amount of money in Marbella´s real estate sector, it is normal to ask oneself which investments are more profitable and which are less profitable, the truth is that the city presents a representative socio-economic growth that projects it as a strategic place.
The most advisable thing to do is to analyse all forms of investment, in order to determine which is the most ideal for your particular situation.
Is renting profitable?
Most people want to buy a property in order to rent it out for profitability. It is one of the most popular investments throughout Spain, in the south and in Marbella. This option is very profitable in the long term, with commercial property being the most profitable.
In this case the least profitable investments are garages because they are in the last place with 5.1%, after commercial premises, offices and flats. Garages may be the least profitable, but they also require the least initial investment.
Although commercial premises are the most profitable, they involve more expenses, depending on the area where they are located. While offices, the company that rents them is usually larger, which gives it more solvency. But the initial investment must be higher.
When it comes to properties that generate 7.4% profitability. This means that in a period of less than 15 years, 100% profitability will have been achieved.
Therefore, they all have their pros and cons. It is important to see which is the most convenient for each person, taking into account the personal reality of each one.
Is it profitable to buy to sell?
It is said that the profitability of buying to sell is not very easy to calculate, but it can reach 30%, a percentage that can be much lower because it depends on different factors such as the purchase price, the price of the renovation and the sale price.
An example is if a flat was bought at 90.000 euros, the reform reached 40.000 euros and then it was sold for 160.000 euros, then the profitability was 30%.
Is indirect investment profitable?
This type of indirect investment includes investment funds, ETF´s, shares and others. Each product has a different return, so it will vary. With ETFs, equities and other similar products, the investment varies with the trade-offs and benefits involved.
What is the way to calculate the return?
Estimating returns in the real estate market is not very easy to say the least. However, it always helps to estimate how much you plan to earn because you can then choose the features and what risk is involved.
Some real estate investments are more profitable than others, but an investment fund could be twice as profitable as renting a flat or an office. The best idea is to analyse on a case-by-case basis in order to be clear about your profitability objectives.
Is it profitable to rent in Marbella?
Marbella covers an area of 114. 3 0 square kilometres and has a group of properties whose value represents almost 20% of the total value of the real estate stock. The high percentage makes the area very attractive to all potential investors.
Marbella is also favoured by its location. It is a particular enclave in which distinguished areas such as Puerto Banús or the Golden Mile are located. Here it is also striking that some properties are worth up to 6 million euros, which is evidence of the exclusivity of the area.