Those who are simply not cut out for real estate investing for a property in Portugal are those who love to watch the ticker roll across the computer monitor or television screen indicating the worth of their portfolios on a daily basis. Those who need to see in print the wisdom of their investment practices rather than those who are content to sit on their investments as they take shape or those who are willing to actively work in order to make their investments pay off.
Buy and hold real estate involved purchasing property and holding on to it for a very long time while the value of the property appreciates in value. This requires someone that is very savvy when making purchases or extremely lucky for the most part. More importantly however, it involves someone who has the patience and tenacity to hold on to their investments for a long period of time. These investments can provide a nice retirement for the right investor as well as funds at the proper time for the weddings of children or to pay for college.
Rental properties, like an “apartamento Figueira da Foz“, are another excellent way to make money for those who are willing to deal with a long-term property investment. In this type of investment money is made each month to either pay or contribute to the mortgage and funds can be made once the property is paid for and sold later in life in order to receive a more complete and total profit from the endeavor. There is some degree of expense along the way that is involved in keeping properties up to date and in demand however the benefits of this particular type of investment are almost undeniable for the right investor.
Flipping is another type of real estate investment that is receiving a large amount of press these days. This process involves purchasing a property below its value, investing in repairing or rehabbing the property, and then reselling the property for a substantial profit. This is one of the few short-term sorts of investment in Portugal, that are widely profitable when it comes to real estate investing. There are others but those carry even greater risks than flipping.
Of course there are high-risk real estate ventures for those that need a little excitement in their lives. One of the more common high-risk investments would be pre-construction real estate investing, very common today in coastal vacation cities like Figueira da Foz, located west and in the center of Portugal, near the major city of Coimbra. With this form of investment the investor is actually ‘betting’ that the future property will sell for a higher price than the investor paid once the building is complete.
Whether your investment needs are low-risk, high-risk, or somewhere in between there is quite likely a style of real estate investment that will be appropriate for your specific investment needs. If you do not find a real estate investment plan that is right for you then do not despair there is no style of investing that is right for everyone.
Risks of Real Estate Investing
All good things carry with them some degree of risk. The same holds true with real estate investing. Despite the promise of high rewards you should temper those ambitions with the reality that the risks involved are more often than not just as high as the potential rewards. For this reason you need to take every possible precaution in order to insure that you minimize your exposure to risk whenever possible or at the very least are prepared, financially and mentally to accept the consequences of those risks if the time comes.
The most obvious risk when it comes to real estate investing is the immediate risk of losing your investment. This risk can be a huge blow depending on how large your investment was to begin with but isn’t the worst thing that can happen during the course of a real estate investment gone wrong. While I’m certainly not trying to talk you out of investing in real estate all together it is a good idea to have a realistic view of the risks and the potential rewards.
If you are flipping houses as your real estate investment you have the potential to loose a little more as you can become injured during the course of your work. The sad truth is that many who are attempting to break into the business of flipping houses have neither adequate insurance coverage (this is true of themselves and the property in general and others that may be working on the property), the money, nor the time that a serious injury might require.
Another risk common to real estate investing like in Figueira da Foz, Portugal, is the fact that stuff happens. Market trends tumble, companies go out of business leaving towns and the local real estate market in shambles, accidents happen during the course of the work, natural disasters occur, and buyers change their minds and pull out at the last minute. Each of these things can have devastating consequences and are almost always events that are completely beyond your control as a real estate investor.
If that wasn’t enough many investors fail to have a proper inspection and find out when it is really too late that there are serious structural problems and other sorts of things wrong with the property. These things cost money to repair and cut into profits, occasionally resulting in a loss. The thing is that once you find out something is wrong with the property you are honor bound to either reveal the problem to potential buyers or fix the problems before selling the house. In the case of a flip, many major problems will undo the work that has already be done. If this doesn’t remind you of the importance of a thorough inspection I have no idea exactly what will but inspections are important for many reasons and can save a lot of time and money if you have one done ahead of time.
Do not allow the risks of real estate investing prevent you from taking the plunge. They are spelled out here to remind you that prudence and caution are wise when investing in real estate not to talk you out of this potentially lucrative field of investing. If you are interested in real estate investing there is no reason on earth you shouldn’t take the time and make the effort to learn more about its potential.