Editor’s note: This article was first published in April 2010, after the collapse of the Spanish property bubble. “The economic situation the country is going through”, the limits on new building projects and the low home prices all describe that moment.
Many people say that, given the economic situation the country is going through, this is not the best time to invest in or buy property, land, country estates and so on.
It’s not that this is a bad time to invest in real estate. You simply have to change the way you invest in it.
Speculators can carry on doing their job, though right now it calls for more knowledge and less risk.
In times of crisis and in boom times alike, there will always be people who need a home to move into, just as there will always be rich and poor.
The days of buying a property for X and selling it a month later for X+Y are over. So are the days of buying rural land, getting it rezoned for development and watching its value rise, because building projects are now very limited. There are still opportunities to do it, but more factors have to be taken into account.
Those who want to keep investing in real estate speculatively currently have only these options:
- Buying at auction: the auction business consists of buying a property that the bank has repossessed from its owner. The bank often puts the property up for auction for the amount of the debt the borrower owes it. It’s a way to find so-called “property bargains”. And if you’re lucky enough to have a buyer lined up when you acquire the property, the profit is guaranteed.
- Buying to turn the property into a business: more and more investors keep buying properties in order to turn them into a business. Their goal isn’t to resell; it’s to make the property a profitable asset, either by buying it to rent out or by using it for a business, as we discussed in a previous article on business ideas for making money from your property.
- Doing the same as a few years ago, but in countries where the “property boom” is just getting started.
As we can see, there are still opportunities that make investing in real estate worthwhile, not to mention the main one: if you need a home to live in, you can get prices that seemed impossible just a few years ago.
Further reading
- Countries where a property boom is just beginning
- A home as an asset or as a liability
- What to invest in during a crisis
- Investing in a business
- The mindset of an entrepreneur
Featured image: advokatsmart.no, CC BY 2.0, via Wikimedia Commons.
