10 Questions a Real Estate Investor Asks

Making a real estate investment is an action that takes a long time and involves high sums of money. For this reason, it is a process that must be done carefully, making a careful analysis of the situation.

If you have already invested in a property or are about to do so, it is likely that you have had one of the following concerns. Here are the ten questions that plague a real estate investor.

Questions about investing or buying a property

• How to finance:

Do I have enough funds to finance my investment? What is the minimum amount that I will need to finance with credit? What is the appropriate percentage of credit that I should request for my investment? Will it be convenient to associate with a partner that provides me with capital to finance my investment?

• How many vacancies:

What level of vacancy will you be able to tolerate regarding my investment? Will I have financial solvency to face periods of vacancy or default on my property?

• How much to remodel

Is this remodel worth doing? Are these arrangements really attractive to tenants? How much will this remodeling allow me to raise the rents?

• How to compare:

How to compare two properties to invest? Is this property better than this other, if they both have different selling prices and different prices at which you could lease it?

• When to remodel

When should you spend on repairs or remodeling? Is it more convenient to carry out this remodeling when buying the property, or is it more convenient to do it when you put it up for sale?

• Project income:

When investing, what will the potential income of my property be like? How much should the rent of my property be to achieve the desired return on investment? Will I be able to effectively lease my property at the price I need to achieve that profitability?

. Lease Price:

When I am leasing, how is the price of my property leasing in relation to the market? How to adjust or update the rental price? Will it be correct to charge the tenant?

. Selling price:

 At the time of selling, what is a good price to sell considering the market conditions? What is the price that I must sell my property to obtain the desired profitability?

. When to sell:

Is it a good time to sell? Is it convenient to wait a while longer to sell my property? Can it continue to increase in value, or will it devalue?

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Family Property: What you should know

In short, a family asset is that which serves as a residence for a family. In material terms, the family asset corresponds to the property used as housing by the family and also to the movable property contained in the family property. This explanation is practically the definition that the Civil Code makes in its article 144 on this matter:

What is the use of declaring a family asset?

You are probably wondering what a family good does for a family. The answer is to protect the family’s residence against certain situations that could put it at risk.

For example, protecting it against the eventuality that a family loses its home because one of the spouses decided to sell it and dispose of it without the consent of the other spouse. Or, protect it from the owner of the real estate paying it in favor of a third party.

 As we will see later, there are certain restrictions that prevent these situations from happening thanks to the fact that a property was declared as family.

How is a property declared as a family asset?

Declaring a property as a family asset is a fairly expedited process, in accordance with the provisions of the Civil Code. The law considers the following rules for this:

  • The Family Court Judge summons the interested spouses to a preparatory hearing. If there is no opposition from any of the parties, and there is sufficient background, the judge decides in that same hearing to declare a property as a relative.
  • If there is a lack of information, the judge will summon a second trial hearing to resolve the statement.
  • In any case, it is enough to file a lawsuit to declare a property as a family for a judge to provisionally transform it as such. To do this, it will notify the Real Estate Conservator ex officio so that it can enter a sub-registration on the property.

What happens to a family asset when there is a divorce?

When a marriage is over, and the spouses are separated or formally divorced, there are several points to keep in mind regarding family assets:

  • The law allows spouses to disaffect a family asset by mutual agreement. If it is real property, this declaration must be made by public deed.
  • If there is no agreement between the spouses to disaffect a family asset, and the owner is the one who wants to disaffect it, I can request it before a judge, arguing that it is not being used as a family residence. This must be proven so that the judge disaffects the real property ex officio.
  • This request before a judge can also be made by any of the spouses or co-inhabitants under the same argument, in the event that the marriage is declared null, or is terminated by death or divorce.

Also, keep in mind that a judge can establish in favor of the non-owner spouse a right of usufruct or use or habitation of a family asset for a specified period to protect the interests of the children or the assets of the spouses.

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Cycles of the real estate market: When is a good time to invest?

If we are able to understand what the phases of the real estate cycle are and at what point we are from the analysis of information on the real estate market, we should have the ability to foresee what will happen in the coming years and what to expect.

For example, if we know that we are at the beginning of the recovery phase of the cycle, we will know that there will be a long period ahead in which house prices will increase. Therefore, we will be much more confident in investing in a property, hoping that it will appreciate in the coming years.

On the contrary, if we determine that we are at the end of the period of expansion and the beginning of a period of oversupply, we will know that the recession will come sooner rather than later. Under this conclusion, surely, we will be more conservative when it comes to investing in a property, avoiding paying for a property that is overvalued. On the contrary, we may well decide to keep our money in a more liquid asset and even take advantage of that moment to sell a property before prices fall. Then, take advantage of the recession phase to buy properties at a much more reasonable price.

Where are we now?

After the 2008 crisis, property prices bottomed out a couple of years later. After that, the values ​​have been increasing consistently.

If the theory that we have reviewed in this article is true, we should see a peak in property prices in 2024 and experience the outbreak of an upcoming economic crisis around 2026. Thus, prices should bottom again near 2030.

Now, in a globalized world like the one we live in, the economy is naturally difficult to fully predict. Despite the fact that, as we have said, the real estate cycle over the years has been consistent in its duration, we are not in a position to ensure that the current cycle meets its agenda. The next economic crisis could well be precipitated earlier than expected, considering the complex dynamics that govern the world economy, such as the recent trade war between the US and China. The advice is to remain cautious by carefully observing the signals of the market and having as a reference what we have exposed in this post.…

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