The concept of profitable real estate allows investors to earn monthly income by renting out real estate. It is easier to obtain than heritage, and its goal is not long-term preservation. How does real estate income work? Find the answer below.
Investment property: a short-term asset
Investment property is regarded as the opposite of heritage property. In other words, investment in income-based real estate involves purchasing property and keeping it for a period of time, which is different from traditionally building new real estate in large cities such as Toulouse, Lyon, Paris or Marseille.
This means that the property will be sold in the near future and will not be retained for several years like a heritage property.
In fact, income-based real estate focuses on income-generating capabilities. Therefore, this aspect focuses on rental prices, rather than changes in the price per square meter over time. The main purpose is also to ensure a quick return on investment in order to take advantage of the profits collected from the rent.
However, investing in this type of real estate requires good market research. For this, important aspects must be considered, such as housing demand, property purchase price or average rent based on the location of the property.
Low purchase price, moderate rent
Usually, investment properties are made in less attractive areas. Indeed, suburban and rural areas are favored for this type of leasing investment. The reason is that the purchase price there is lower than in the city center. The appreciation speed is slower, but it is easier to obtain assets.
Therefore, this means that you can visit the property with a small budget. As part of buying a new home, the property can be rented out faster. Soon after the acquisition, you will be able to enjoy a stable income every month. However, compared with popular areas, the rent is relatively moderate. However, it will be easier to find tenants with good durability.
In short, investing in property is a practice that enables you to own solid assets at a low cost. Therefore, investment amortization can be done more easily. Therefore, you will be able to recover all the funds invested in a few years. After the return on investment is completed, you will be able to fully enjoy the benefits.
An investment transferred to the high-end market
As the housing shortage increases, the property value of remote communities also increases. Therefore, keeping the property as a medium-term asset will enable investors to obtain capital gains from their investment. Therefore, the rent can increase over time.
Therefore, this growth allows a shift to the high-end market. This includes selling the property to obtain another property with better profitability. At this point, the process was restarted, but the location was more interesting and therefore more profitable for investors.