Some strategies for investing in real estate in times of crisis
For professionals, a savings strategy is critical to achieving future real estate investment. Your outlook must be optimistic.
According to: Renato Herrera Lagos
The current context regarding the economic situation facing the country, and in particular the real estate market, presents some important variables and significant challenges for the sector, which is trying to escape what some experts have described as a “perfect storm”.
Variables such as the response time of DOM to enable new works, stagnation in business in the banking world, some of the options that the government manages to implement, corruption issues and the values of projects trying to “finish” their immediate delivery stocks are a concern for many and solution.
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Therefore, today we are faced with the need to adopt strategic approaches to investments, especially in the real estate sector.
Such uncertainty inevitably raises questions about how to protect and grow capital, and it is in this scenario that we highlight essential savings strategies for real estate investors.
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For Marco Dissi, founder of Rentabilizar.cl, he warns at this point that just as there are tailored suits, real estate investment proposals can also be designed according to the income of each person or family.
“There are opportunities in times of crisis, but you have to know how to look for them. It is estimated that only in the second half of 2024 the real estate industry could begin to rebound, with companies in the sector likely to go bankrupt during this period,” comments the executive.
According to statistics from the Insolvency and Re-Entreprise Supervision, 72 applications for liquidation from construction-related companies were received during the first half of 2023, which represents 2% compared to 2021. Likewise, the debtor companies in the sector that entered the Reorganization were four, the same number as submitted in in 2022.
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“Others will endure the adverse scenario and probably dispose of projects with immediate deliveries that, for example, they need to sell and satisfy the banks, old projects with storage, etc. And there are investment opportunities,” says Dissi.
There are still some opportunities for the professional in the used housing scenario. “Owners of these properties need to sell quickly to be able to value their investment, so I would recommend considering both alternatives and comparing prices, locations, sectors and thereby making an informed decision.”
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In this sense, Marco Dissi provides 3 key factors when investing in 2024, which clearly looks challenging.
The first is repayment in installments coupled with financial flexibility for sustainable investments. It consists of the benefit of buying with a future delivery, which gives you the option to pay the leg in installments, which means that you will only have to pay 10% to 20% of the value of the property initially. This financial flexibility becomes an attractive strategy for those who want to invest in real estate in a more affordable way.
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Another factor is to analyze low prices as a unique opportunity to negotiate a better price. The drop in demand for real estate purchases generates a drop in prices and discounts from real estate agencies and construction companies. This situation offers investors a unique opportunity to acquire real estate at lower prices and on more favorable terms.
Finally, the third factor is the future capital gain, associated with investing today, in order to make a profit in the short term, because buying real estate is not only securing a tangible asset, but it is also an investment in the future. Historically, property values have seen annual increases of 5% to 10%. Long-term capital gains position real estate investing as a solid strategy for those looking for significant returns in the future.
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The current economic situation presents challenges but also opens up opportunities for real estate investors. The combination of lower prices, the option to pay the fee in installments and long-term capital gains make real estate investment an attractive and strategic option in times of crisis.
Those who take advantage of these conditions could find a solid path to financial growth as the economy recovers.