hot potato, a brick and a chester sofa?
This title that looks like a chapter that is coming is a clear example of the current current that is being generated with the purchase of housing as an investment.
Currently the investment in buying brick has a serious problem ( our hot potato) . With the expenses that the transaction originates and with a net profitability (after the removal of the cats) that is around 3-4.5%, this can slow down up to 3 years to recover only the expenses made .
Let's see this in an example:
We carry out the purchase of a property in Catalonia for an amount of € 100,000, this would be a brief explanation of the costs of the sale.
Community AJD tax
Imp. Tran. Patrimonial
VAT (Notary, Registry, Manager)
Total Purchase Expenses
We have to start thinking after minute one in which we have made this purchase, at least we will have to make profitable the costs of the sale that amount to € 11,034.00, our brick appears here .
To resolve this issue, we get in touch with Manolo, our real estate manager, who has offered us the bargain to buy this little apartment, and we ask him to do us the favor of finding a good, good-looking tenant with possibilities to rent the house and that it is for us. offer a monthly return.
We started with the game gentlemen, we are investors and we are supposed to be intelligent, that's why we have money.
At present there is abundant supply for rent. What price would you be willing to offer for rent?
Think about it carefully, remember that the average of non - payments for rent is around 15-17% , in this percentage of cases you will have trouble collecting a rent whose value is falling.
We close the price at a low amount but easy to settle by a possible tenant € 300.
Assuming that we have no problems in the collection and the tenant pays his € 300 religiously, the mathematics removes us from doubts.
300 × 12 = € 3,600 / year
€ 11,034 / € 3,600 / year = 3,065 year / days
This tells us that it will take us approximately 3 years and a month to be able to obtain benefits with our rent, if we do not have problems with the tenant.
On the other hand, if we compare this with quality deposits and bonds that are increasingly offering lower profitability, and that currently in a deflationary period any profitability higher than 0%, even a little lower is good, forces us to look for new ways to invest our money.
finally the chester couch
But if you are not happy with this we can take our money and buy a chester sofa (which has become fashionable) with which we can chat with our friends or take a good nap that is always appreciated.
At SEattle Meditation we offer investment in real estate with superior profitability and without incurring the costs of a sale. In a later post we will offer a comparison between an investment between individuals and an investment in a sale.
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