Banks want to invest in apartments for rent, the new fashionable market

With homeownership exceeding 80% of the market, residential leasing barely aroused interest among investors. However, this trend has been reversed. And today, the possibility of investing in apartments for rent not only attracts individuals.

Traditionally, the Spanish have owned eight out of every ten homes. A figure that left the rental market as a residual segment.

But the situation is changing by leaps and bounds. With the average price exceeding pre-crisis levels and the signing of mortgages around 330,000 annual contracts, large investors are looking for alternatives.

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It is true that the major real estate firms have spent little time in the rental business. However, the large increase in demand and the lack of sufficient supply have ended up triggering interest in a new and burgeoning market. Invest in apartments for rent.

Business that manages to provide returns close to 10% per year. A benefit never seen before. An opportunity that banks do not want to miss.

Will you let her pass? Oi Realtor wants take advantage!

The 'slow' awakening of promoters

While real estate development gradually reactivates, the demand for housing is already advancing at cruising speed.

Difficulties in accessing mortgage financing mean that renting a home is not just an option for young people. Workers without large incomes also resort to this residential formula.

Although the market does not offer many alternatives either. On the one hand, the aid of the new Housing Plan is insufficient compared to the great existing demand. Despite some concrete measures .

While developers lack incentives to tackle new construction projects. Especially if we take into account impositions such as those of the Barcelona City Council. Forcing a part of the projects to be allocated to social housing.

Faced with this situation, and abandoned the role of real estate intermediary due to the fall of many promoters, banks see the great opportunity of investing in apartments for rent. A type of asset with returns around 10%, while the rates continue in negative numbers.

The business of investing in apartments for rent

2018 is giving way to a new and profitable market: rental housing.

Taking into account that Spain has 18.5 million homes (Data: INE) and that 22% of the total are rental homes, there are 4.7 million homes contributing monthly income.

' Even so, it should be noted that 95% of the leased is controlled exclusively by individuals. Leaving only 5% in the hands of companies, 'says Luis Gualtieri (CEO of Oi Realtor). " This is a market with potential that investors have a unique opportunity to enter ."

So far, "it has been private capital who has taken the initiative, after seeing the possibilities of the business and the high profitability ," explains JM Cervera (Renta Corporación). " The public sector will have no choice but to enter, but it will be the private sector that makes a greater number of rental homes available to the market ."

The bank makes it easy to buy to rent

Compared to other European countries, such as Germany, Ireland or the United Kingdom, the rental market in Spain still has a long way to go.

At the moment, the bank is offering mortgages to individuals who want to invest in apartments for rent. A business that provides income, not only to pay the loan but also to cover the expenses of renting and maintaining the home.

In addition, the recently approved Express Eviction Law gives even more security to the property owner. Clearly stipulating the conditions that allow a tenant to be evicted in less than 30 days. In case of non-payment of the monthly rent.

And, finally, we must not forget the great tax advantages that the Socimis have at their disposal. A fact that facilitates investment and specialization in this market. Although it is still necessary to incorporate new and profitable real estate assets.

Even more so this week, after confirming increases of 3.7% in rental income. According to the ARCA Index .

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