When we face an irregular economic scenario or high inflation, housing gets considered an investment that is safe and profitable. For this reason, this year is good timing for investing in real estate.
Another incentive to opt for investment in housing in 2022 is the gross rental return. According to data from the Bank of Spain, it stood at 3.7% in 2021, while the return of 10-year government bonds, for example, barely reached 0.5%.
Therefore, real estate investment stands as a magnificent opportunity. However, we must assess some key aspects when choosing real estate if we're seeking to obtain maximum profitability.
Key elements to look for in a property when investing in housing in 2022
When the goal is rent, this is an essential aspect. It is fundamentally about looking for properties in areas with good services and well connected. In short, that can be attractive to all types of people.
It is also interesting to opt for expanding areas, where sales prices are more reduced, or for those close to large business or university centres.
2. Typology of housing
It's another priority issue when considering investing in housing in 2022. Currently, the most demanded are two- and three-bedroom homes. But when renting, other aspects are also valued, such as whether the building has common areas or a garage. Homes with those facilities may have a higher price, but so will be the profit from the investment.
3. State of the property
It is not just about the conservation of the building in which the home is. When considering housing investment in 2022, it will also be necessary to look at whether or not it needs reforms. A dwelling that needs renovation, a priori, seems unattractive.
However, a renovation can be the opportunity to make the property appealing to more potential renters, which will increase rental possibilities and property value.
The goal when investing is getting profits. That's why it is a must to analyze the market. That profitability varies enormously from place to place. For example, according to Tinsa, in the last quarter of 2021, gross rental return in Barcelona varied between 3.3% and 4.7% depending on the district. The ideal is to find a balance between profitability and risk.
5. The purpose of the investment
In this sense, we must decide if we want a holiday rental or a long-term. Anyway, it will be necessary to analyze what type of housing and locations are the most demanded. We recommend leaving aside the most stressed areas, where, in addition, and according to the latest legislative changes, rental prices could be limited.
Investment in housing in 2022 offers favourable prospects in terms of profitability. And everything indicates that prices in the real estate sector will continue to rise. Therefore, this is the best time to look for a property in terms of investing.
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