Buy to let, one of the best options where to invest

Buy to let, one of the best options where to invest

In a time when traditional investment offers low yields, buying a home to rent (buy-to-let) is one of the best opportunities to invest and create savings for the future.

In one hand, the sale prices of real estate have increased for the third year in a row and the volume of purchases has grown significantly. On the other hand, the mortgage concessions increase, and the rents experience important increases, becoming one of the best businesses to invest and that encourages investors to acquire properties and subsequently renting them out.

Invest in profitable business: the rent

A few years ago renting an apartment to live was unusual in Spain and was considered “throwing away the money.”

However, this situation has changed drastically and nowadays percentage of the population that rents a home continues to grow and is increasingly positioned as an alternative to purchase.

While at the beginning of the crisis, only 7.7% of the Spanish properties were rented, nowadays (in the first months of 2017) this percentage has risen to nearly 24% and the forecast is that this increase will continue.

In fact, this change is accompanied by a strong demand for property rental. According to Idealista, 12% of the leased apartments in Spain were available in the market for less than 48 hours.

The characteristics of the property that were rented can be seen in the graphic below:

rent

As you can see, 46% of the properties are located in a monthly rate between 501 and 750 Euros and with a size between 41 and 80 square meters.

Nevertheless, this percentage continues to be very small when compared to Spanish European neighbours:

  • Germany, with 50% of tenants.
  • Portugal, 25.2% of the total.
  • Italy, 27.1%.
  • France, 35.9%.
  • United Kingdom, 36.5%.

However, in just four years we have made a significant leap and gained a lot of ground. This 23.5% of Spaniards renting a home, brings us closer to 30% of the population of the European Union which, according to Eurostat data, lives on a lease basis.

The causes of this change of mind are multiple although, perhaps, among the most important we can emphasize:

  • The entrance of new generations (see our blog entry on millennials).
  • Conditions in the most restrictive mortgages, it is necessary to have saved 30% of the amount of the property to be able to acquire it.
  • The greater flexibility and freedom of living of rent.

The reality is that, according to a study of the real-estate company Fotocasa, only 4 out of 10 Spaniards consider that renting is throwing money away (in 2011 this proportion was 6 out of 10) and 8 out of 10 defend that it is a good option of life.

Profitable businesses with small investment

The fact that the rental business is one of the most profitable projects where to invest contrasts with the high initial investment that is needed to acquire a property.

However, with Housers this situation has changed and now from € 50 you can start investing in the real estate market in an easy and fast way.https://www.housers.com/en/

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