2023-07-08 12:55:32
Real estate investment, traditionally, has been reserved for large estates, who could buy a hotel, a large office building or a shopping mall. Individuals could only make their savings profitable through the acquisition of a garage space or even a home. However, all these options required a large previous saving, being unfeasible for less than 10,000 or 20,000 euros, even financing it through a mortgage.
In recent years, as in other markets, such as the stock market, investment in the real estate sector has been democratized. Now there are investment options on the market from 250 or 500 euros or even less.
Socimis paved the way
Las partners (Listed Real Estate Investment Companies) are companies whose sole purpose is buy real estate assets and then rent them out and collect periodic rents. Its tax formula is similar to that of the Reit international: they are required to be listed on the stock market, do not pay corporate tax and are required to distribute their profits to their shareholders through dividends.
The two largest in Spain are Colonial, with office buildings in the best areas of Paris, Madrid and Barcelona, and Merlin Properties, which also owns offices, shopping centers, logistics warehouses and soon data centers. Both are present in the Ibex-35 and have liquidity to buy and sell, allowing individuals invest in real estate from six or seven euros, the price of its shares. In return, they hand out a dividend with an annual return of around 5% on the current price of the shares. Lar España is the third Socimi by size and liquidity. This is specialized in shopping centers and parks and offers a dividend yield higher than its rivals, in double digits.
The biggest disadvantage of this type of real estate investment is that, as they are listed companies, their value is subject to that of the financial markets, just like an electricity or technology company. The shares of these Socimis have been trading downward since the outbreak of the pandemic, in the first weeks of 2020, and have never recovered the values of 2019. On the other hand, analysts point out that this can be an opportunity because companies trade at a discount, with respect to the value of their assets. For example, Colonial has properties valued at 11.83 euros per share and its price on the stock market is slightly above 5 euros.
Crowdfunding, hand in hand with digitization
With digitization came crowdfundings specialized in real estate to the real estate sector. Initially, they consisted of enter into a partnership with a promoter to develop a specific project, for example, buy land and build a housing development. Here the returns are variable and will depend on the final profitability of the project. Normally, annualized, they are usually more than 10% or 15%, although they carry a risk, and with tickets that start at 250, 500 or 1,000 euros.
Later they evolved into what is known as lendingwhat is make a loan to a developer to build or buy land. Here, the participants of the crowdfunding They make a fixed-rate loan, which at maturity will repay the principal and pay interest. The return for the investor, depending on the risk, usually ranges between 8% and 12% per year.
Related news
The last business they have joined is rents. In this mode, a group of investors buy an assetuntil now commercial premises, which are rented to a brand, for example to a supermarket chain. This allows them to receive periodic incomenormally every three months, and recover the invested capital when the asset is sold, between three and five years after the acquisition.
Housers was the first company to bring crowdfunding to Spain. Subsequently, Urbanitae has been the one that has grown the most, with the support of important venture capital funds and even with the Andorran bank, Andbank. In the heat of the growth of these platforms, others already fully established in the market have been born, such as Wecityled by the former CEO of the consultancy Savills, Rafael Merry del Val, or Fellow Funders.
#invest #brick #buying #house #garage