Buying a home to rent is still one of the most popular investments, both amongst Italians and foreigners. But for a rented apartment to be profitable, some aspects have to be taken into account.
The option of renting a house to generate additional income is not only very popular in Italy, but also in the rest of Europe. Often the logic behind the investment is similar, if not identical, to that of Italy. Although as Jesús Duque, (vice president of the Spanish chain Alfa Inmobiliaria) said, the error is just around the corner.
In addition, in the case of bad investment valuations, properties may take longer than expected to be sold. Therefore, it is important to ensure that the house is in good condition and evaluate the fixed expenses.
To help investors understand if a house is suitable for an investment, the Alfa Inmobiliaria network makes these recommendations:
1. Make sure the house is in good condition. Painting or retouching a bathroom is not too problematic. However, if the rest of the apartment "is badly damaged and expensive repairs must be carried out frequently or if it requires a total renovation, it will be necessary to organise the accounts well so that the investment is profitable in the short or medium term," says Duque.
2. Fixed expenses such as community fees or taxes should be considered. But also a possible default of payment or an unexpected departure of tenants. Everything must be taken into account when evaluating the profitability of a house.
3. Choose a good location. If you want your house to be continously rented, choose a property that meets the needs of a wide audience, regardless of your personal tastes and needs. It is preferable to choose a two-bedroom apartment, with nearby schools and shopping areas, infrastructure, transportation, restaurants, etc. "For a first time investor, we never recommend betting on new and unconsolidated neighborhoods that can take years to obtain an application," the director of Alfa Inmobiliaria adds.
4. Find out the real price at which you can rent the house. The most common way to set the rental price of a house is to look for the price of other similar properties in the area.
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