What options are there for investing now in Spanish brick?

Wednesday, March 12, 2014

What options are there for investing now in the Spanish Real Estate?

The emergence of large funds in the real estate scene has generated some buzz about whether now is the turning point for the sector. while some investors grope, others are already taking positions. however, the range of possibilities that exist today to bet on the real estate business is quite small. direct purchase of properties, The REIT, real estate funds or shares in real estate in the bag are the only alternatives although not enjoy the pleasure of analysts

Being the black sheep to become a star market . international perception of the Spanish Brick has changed dramatically in a few months. this has allowed to see a trickle of transactions within the sector since last summer. a trend that, according to experts, is expected to continue through this year

But one thing is going into brick and other find the right way to do it. President bnp paribas real estate Spain, luis martin guirado indicates that is not the same login as an individual, as a family office, as an institutional fund or a small corporate. at the same time, remember that there are multiple ways to land in the real estate business with direct investment, through a partnership, of a collective investment (REIT or fund) or an indirect investment

In other words, the combinations are varied. "An institutional investor can enter directly buying the asset or forming their own REIT or invest in any of them." "In the end, everything depends on the level of control you want to take over the property and the risk you're willing to take" sentence

In that sense, Martin guirado clarifies that if you buy a local unfunded "you are the lord and master" but run with a number of risks: if you manage to rent or not, if ignited, etc. however, if you choose to take an interest in an investment company, which has invested in 50 local, the control you have on the real estate asset "zero" but the risk is shared

But regardless of the investor profile (more or less risk averse, more or less available capital, etc.) and the "form" as the active controlled, the fact is that analysts believe that the general options are only four possibilities

Purchase to lease what one in five new homeowners does

Rental force

• Experts detect gross returns ranging from 4.6% to 8%
• Many new investors are buying home cash

"There is a cultural issue, It is pure and simple economics." Such confidence responsive sources a consultancy to the question of whether or not there is a change of mentality that explains the current rise of rent. Indeed something moves on the market.'s hard to detect what the statistics, as there are no official studies to measure rates of leases in Spain and there is not even a holiday census. Indeed, the Spanish government is studying the best way to develop one, but the project is still building, according to sources from Obras Publicas.

The only official for years in Spain is only 12% or 13% of households living in rented, while the remaining 85% own. These percentages contrast with the European average of 70% of owners and 30% of renters and away from reality in Germany, where more than half of the population chooses to rent.

With or without the cultural factor, the arrival of the economic boom of the post-Franco Spain and, above all, the adoption of the euro and the free bar credit, caused all the economic parameters advise buy and not rent. The benefits were for the two components of the market: supply and demand.

From the demand side, the massive entry of baby boomers into the labor market made ​​him shoot the housing need. In this context, the emergence of mortgage financing to minimum interest rates and repayment terms in eternal appearance made ​​affordable purchase for almost all segments of the population.

Then came a time when a housing similar income requesting his own rent was equal to the mortgage payment to be paid if the house was acquired, which helped it coined the famous slogan: "is that the same money, it is better to buy than rent, so no money is pulled. "

For although it is true that the purchase has to be paid the first year a number of expenses that the rent not required (entry, taxes, notary, registration and management services, among others), dealing with banks and finance 100% if the property value was not available prior saving enough.

Automatic adjustment

And all spurred by a bullish market price revaluations two digits each year and a system of state aid (VPO) and tax deductions that only invited to buy and rent seemed to have forgotten.

On the supply side only need to remember that Spain came to build more homes than Germany, France and Italy together and have an empty apartment was one of the most profitable investments possible, as it was thought that the price increase would not stop ever.

Then came the crisis and the bursting of the bubble ended with that other mantra of "housing never low." At the moment, however, everything seems to conspire in favor of rent .

The houses have become cheaper on average between 40% and 50% since it peaked (as the statistic to see) and gross rental yield stabilizes at around 4.6%, according to Bank of Spain .

Other sources say that the financial sector in certain neighborhoods with high demand for leasing, that gross return rises to 7% or 8%, "which in net terms gives a gain of 6.5%. No financial product can compete with that. " These two factors (cheaper houses and interesting perspective yields) are those who are leading that one in five new homeowners are buying homes to rent r, as confirmed by all sources consulted sector.

Moreover, this is that while the prices of home sales fall will not stop at least in the short term, income closed 2013 with an average decline of 3.06%, the study of Pisos.com, and such as Idealista.com remember, your tendency is to stabilize throughout this year. In fact, in some neighborhoods Sought leases Madrid or Barcelona and regrow.

So, for those who have savings, "homes on the market at very attractive prices that are being purchased without a mortgage and are as tenant, are beginning to offer benefits," recalls Luis Corral, CEO of Foro Consultores.

Those who are now thinking of renting either by obligation (their income did not allow them access to home ownership) or conviction (opponents of long-term debt), also have more advantages than in the past years. On the one hand, an abundant supply of choice, resulting in increased price competition and, secondly, a plan for public support in the making. Whether this improvement will continue to not rent to reach European levels is anybody's guess, but that largely depends on recovery speed and the new mortgage banking policy.

Who will buy house this year

Investors: solvent demand is beginning to see that the setting is at an end and the time has come to buy. Many of them rented.

Foreiners Come to Spain great opportunities. They prefer the coast and the most exclusive areas of Madrid or Barcelona.

Replenishment: Families who need a larger or better located apartment, although most current sell to buy.

New homes: The key segment, but is is the most dependent on the economic situation.

Economic keys to a good start 2014

Tips to survive the January slope

Wednesday, January 15, 2014

Take advantage of tax benefits, invest head and not get carried away by the 'bargains' are some of the keys to successfully tackle the dreaded hill of January. through a Decalogue, the European association of financial advisors (EFPA) gives the keys to a good start 2014

- Eliminate unnecessary expenses, especially of products and services used or sometimes
- Out of debt that can not be paid. for it is desirable to organize and analyze the budget to meet the fixed costs
- Do not forget that increases the price of many commodities, such as electricity bill whose cost has increased 2.3 percent, transport and motorway tolls
- Be aware of the tax benefits of some products such as mutual funds and pension plans
- You can reduce the overall personal income tax base with contributions to pension plans in which there is no charge for the benefits that are generated
- Review the conditions of financial products, many of which expire or change with the new year
- Invest in profitable products with professional advice, especially after the return of deposits has fallen sharply due to limitations of Spain or the bank rate cut by the European issuer
- Not improvise and go to a personalized financial plan with the help of a consultant to get more out of savings
- Weigh the request for a loan to be a risky product. learn, invest time and review contracts with banks
- Pay attention to you default interest and fees related to avoid unpleasant surprises
- Doubt the 'bargains' that present certain financial products and actually hide very high interest rates and be careful not to make use of overdraft credit cards
"In a crisis situation like this, and given that the slopes of January the last seven years have been very hard, I would say that this beginning of year 2014 is best presented" detailed to idealistanews director in Spain of EFPA andrea-candidate races, do not hesitate to say that now "we can be more optimistic as the economic recovery in the eurozone is already a reality and the situation in the financial markets has significantly improved (reduced volatility assets and increased profitability) "
While improving the portfolio considered candi-key races go to a qualified financial advisor in order to "ensure that it is investing in the best product"

The purchase of a Home as an investment vs Stocks

8 aspects that question the buy

Friday, January 10, 2014 -

In recent years bulding was positioned as a favorite investment of the Spaniards. Thinking about the price of housing never goes encouraged many people to buy a flat with the intention of selling in the short term to achieve major gains. However, , a home that is not used is a bad investment. Further believes that investing in a home takes more costs to invest in stock market

We can consider eight arguments:

1. housing is a valuable asset but believes that a house that is not used is a bad investment. "You have to paint it, fix it, maintain it, pay for electricity, water, taxes ... If we estimate that the annual maintenance cost is 1% of its value in a hundred years will have spent on maintaining housing an amount equal to what it cost us, "judgment

2. indicates that for rented accommodation had been as profitable as the bag in the last 100 years should have earned an annual return of 6.08%, which is the actual appreciation rate dow jones bag wall street in the last 100 years, including dividends and adjusted for inflation

3. It's Not true that the price of the houses dont goes down

4. All investors can buy shares but is not possible for everyone to purchase houses for them rented.

5. Investing in housing costs leads many to invest in stock market. Input, have to pay for a flat 7% of transfer tax, to which must be added between 1% and 3% in registration fees and notary. In total, the cost ranges between 8% and 10% of the home value. But the fees and expenses to buy shares ranging between 0.2% and 0.5%

6. To buy a good house needed a lot of money. For this reason, many people invest in low-quality housing and unattractive areas, which in the long term ends up not being profitable

7. Housing investment diversification does not allow the majority of investors, they should put all their savings in a single well

8. Manage a portfolio of stocks is easier to manage property assets, says Serrano. Buying or selling a home is more complicated and takes longer to do the same with actions

The price of housing in the united kingdom will rise by 4% in 2014

Tuesday, January 7, 2014 -

halifax bank estimates that the price of housing in uk increase by 4% this year. the bank justifies this growth will occur as a result of the improvement in the British economy and low interest rates. further explains that the government-led "help to buy" program will boost housing demand but dismisses fears of a housing bubble

Halifax economist, Martin Ellis, indicates that the price of homes in uk is 12% below the peak marked in August 2007, while sales transactions remain below those recorded seven years ago

Also, the bank explained that the rise in property prices in the country is increasing the capital of homeowners, allowing them to take these homes on the market next year. therefore considers that this will increase supply and curb rising prices

To buy a resale house, reformed vs to be reformed

To buy a flat 'reformed' may be the first step to achieve our dream home or an endless headache

It is difficult to find a resale home ready to move into without reform, however small. so, pulling posts and brick pickaxe, why not invest in a house 'to throw' and put it to our liking?

To buy a second-hand flat and reform it is an alternative that is gaining more and more followers against new developments. these are the PROs and CONs of opting for a house 'to reform'

PRO 

The price: it is always lower if the floor needs renovation. However, note that then have to add what they cost the works

A home to your liking: a reform can start from scratch and decide the distribution, materials and even some openings to the outside

Sustainable materials and facilities: the works are a good time to introduce sustainability criteria in materials and facilities to help save water and electricity. the house will be more environmentally friendly but also more economical

Subsidies: in many cases, reforms of houses or buildings have public support

Taxes: taxes likely to buy a flat resale are lower than for a new home because they are calculated on the value of the property and not on the value of writing

CON

Headache: any work is a pain. before closing a transaction for the sale of a floor to reform, it is advisable to seek counseling to find out the real potential of the home and avoid surprises

Reform cost: before opt for a house 'reform' is important to consult several professionals on the cost of the work or pay more than planned

Permits and fees: to make structural reforms have to ask permission to the homeowners and the city council or the competent administration. this will involve pay fees to perform the works

Current regulations: keep in mind that today, any property for sale or rent must have the energy certificate

Investment Property, what to repair on?

Surfing the web, we found a practical article about what is concerned on reparations in investment property. With a right point of view the journalist mesures interesting strategies depending of long rental properties or fix and flip homes:

When I buy houses I want a great deal.  I try to buy houses at least 20% below market value and that usually means the houses I buy are in pretty rough shape.  I spend a lot of money on when I repair investment property and it is very important what I do and don’t repair.  I fix and flip homes 10 to 15 homes a year and I also have 7 long-term rental properties.  I have a completely different strategy to repair investment property depending on if it is a fix and flip or rental property.

Keeping repair costs as low as possible, while still making homes nice is a key to my long-term rental strategy.  I detail my strategy in my complete guide to purchasing long-term rental properties.  I include articles on buying, selling, renting and detailed figures on my properties.

Differences when repairing fix and flip vs long-term rental properties

With my long-term rentals I tend to make fewer repairs than I do on the fix and flips.  I will still make the rental property look very nice and make sure it is safe, but I won’t do as many repairs as I would if I were to sell the home.  The reason I don’t fix as much on a rental property is because renters aren’t nearly as picky as buyers.  Most renters do not think of a house they rent as their property, they aren’t as concerned with the age of the mechanical systems or the finish details, because it is not their house.  If something breaks, the landlord will fix it, or at least should fix it.  I have found renters to be very nonchalant about light fixtures and paint color, where buyers are very picky about these items.  In rental property number 7 I left he brass fixtures in the home as an experiment to see if it would be hard to rent (we usually put in nice brushed bronze).  It rented right away and the renters did not even seem to notice the fixtures.

In a fix and flip we will always replace the fixtures and make sure the little things are perfect, because buyers want a home they are buying to be perfect.  The buyers won’t have a landlord to fix anything, they will have to the repairs themselves or pay someone.  A buyer will also most likely hire an inspector who will go through the entire house.  That inspector will find most items wrong with the home and buyers will often get scared off by an inspection that finds many things wrong.  We try to have as few items mentioned on the inspection as possible.  I know many fix and flippers who have an inspection done on their homes after they do repairs.  This allows them to make repairs the inspector finds before listing the home and to advertise the home as pre-inspected… more