Buying a luxury property is one of the best investments that a person who want to earn money can make to increase the value of his wealth.
To have the money in the bank or other deposits and investments is an option, but the interests generated from them are lower than the money you can earn with the purchase and subsequent sale of a luxury property. That’s one of the advantages as we have seen in our article: 3 reasons to invest in luxury properties.
Real estate market is in constant movement and expansion, and although there have been times of crisis, especially in Spain because of the housing bubble, past the time of recession, the value of the houses goes up and will stabilize in prices of yesteryear.
Furthermore, the luxury real estate market has not noticed much the crisis of these yearsbecause people with money who are looking for a luxury property have not seen their wealth diminish and have continued doing business with luxury properties in different places in the world.
HOW TO KNOW IF A LUXURY PROPERTY IS A GOOD OPPORTUNITY TO DO BUSINESS WITH?
Using financial ratios is the way to detect a good investment. These ratios can be used anywhere in the world and basically measure the profitability of a property in order to measure and determine its price and whether the purchase is a good deal or not.
Let’s see an example. If I have the opportunity to buy a luxury property for 1.000.000 € I will have to predetermine how much money I can get if I rent the property. To do this calculation, I compare the price of renting a similar home and establish a profitability ratio that will determine whether the price of the property is a good price or not.
These ratios measure a static chance at a given moment, but also like any other market, should assess dynamic factors to measure market trends and know what geographic areas are on the rise due to factors such as location of the property, location of schools, proximity of the access roads, and workplaces location among other factors.
In real estate investing, like in any other business, financial ratios are important but the mathematics is not everything. The anticipation to these dynamic factors will be the key to become a millionaire in this business.
Of course, having help from real estate agents specialist in the sector will be a plus for doing business and to get the success that you are looking for when you want to get money from a luxury property for sale.