When the terms "real estate" or "real estate investment" are mentioned, the most common reactions are "it's too expensive", "I can't afford to buy" or "it's far too complicated". However, investing in cheap real estate is quite possible in 2022! Contrary to belief, it is even also possible to invest in real estate when we have no equity. In this new article, Lica presents you different solutions to invest in cheap real estate!
What do we mean by a cheap real estate investment?
A cheap real estate investment is often associated with apartments or houses in Switzerland. However, there are many other possibilities when it comes to cheap real estate investment. Whether investing in Switzerland or abroad, the opportunities are numerous. Moreover, they often do not require any equity contribution.
A cheap real estate investment could range in price from CHF 50,000.- to CHF 250,000.-. In this price range, traditional mortgage financing will therefore often be unsuitable. Indeed, a bank will generally not wish to finance this type of object. This, because of the low profitability on the file and the difficulties in estimating the price. Therefore, a private credit will therefore be particularly suited to this type of acquisition. The funds will be paid quickly and you will also not need to justify your acquisition. With good profitability on your real estate purchase and good conditions with your private loan, you could achieve a very nice operation!
Here is our selection of cheap real estate in which you could invest easily and without own funds with the help of a private loan.
Cheap property investment abroad in Portugal
Property prices abroad are not the same as in Switzerland. The prices are much more attractive!
Tourist areas also offer great opportunities to invest in cheap real estate. At Lica we are particularly fond of real estate investments in Portugal and more specifically in the Algarve. The country offers a multitude of advantages which are as follows:
- Taxation is advantageous for foreign investors.
- The climate is mild and it can accommodate tourists over a long period of the year.
- Real estate prices are very attractive and are increasing steadily.
- Real estate investments in Portugal make it possible to obtain good returns.
- The economic recovery and the improvement of the country's situation following the health crisis have an impact on the price of real estate which should continue to increase regularly.
- And owning real estate in Portugal allows you to have a foothold for your own vacation or for your retirement.
Buying real estate today in Portugal is therefore the best time to invest in cheap real estate!
Parking spaces in Switzerland
One of the most sought-after objects in cities are parking spaces or box-type garages. Indeed, obtaining a parking space or a garage offers very good real estate yields because these are increasingly sought-after objects. This type of property is perfectly suited as a cheap and easily financeable real estate investment with the help of a private credit.
In addition, the parking space or the garage is an investment that will only require very little maintenance. For a parking space, it will be necessary to plan a coat of paint on the ground every 10-15 years. For the garage, these are often integrated into PPE, the renovation fund will often be sufficient for the maintenance of your box.
Land in the process of being decommissioned
In the same style as parking lots and garages, you can inquire about investing in land. Prices continually rise with the need for housing. Thus, prices will continue to rise in the years to come. Investing in land is therefore a guarantee of future real estate returns. Before investing in land, ask yourself what you want to buy it for and find out about its future downgrading. Will it become constructible or will it remain in an agricultural zone? Is there development potential in the region?
Some people aim to acquire land as a cheap real estate purchase. This because of the possibilities of gain on the future fragmentation of the plot. It is indeed possible to earn money by buying land whose plots will be divided up in order to sell them individually to build houses there for example.
Small businesses are a very good example of cheap real estate investment. Whether in large or small towns, some small businesses remain essential. They will continue to exist despite the growing importance of internet commerce. Real estate yields for a commercial property are generally higher than for a residential property (5% to 7% against 3% to 5%). Prices in Switzerland vary greatly depending on the region and the type of activity you are looking for.
If you decide to orient yourself on this type of cheap real estate purchase, you will have to be particularly attentive to the keeping of the accounts of the business that you wish to buy. Here are a few things to check before embarking on an acquisition:
- Are the company's accounts up to date?
- Are there any delays or unpaid debts?
- How will trade evolve in the coming years (location, competition, etc.)?
- What will my time investment be to make the trade work?
The acquisition of a goodwill can therefore prove to be very profitable. However, it will require a little more extensive knowledge than for the purchase of real estate. If you do not have the required skills, get help from a professional on the subject!
Invest at low cost in studios or small apartments
If you rather want to invest in residential, studios and small apartments are perfect solutions for you. These are the most sought-after rental properties. Although the price per m2 is higher in comparison with larger apartments, the price per m2 for rent is also much higher for this type of object. Thus, the purchase of a studio or a small apartment will be an inexpensive real estate purchase that will offer you good real estate returns in the medium and long term. In Switzerland, it is quite possible to buy a small apartment using a private financing.
real estate investment by crowdfunding (or participatory investment) is also an interesting solution. However in these cases the movable property will not belong to you because you will only have a small part of the property. We could summarize this solution as being often less profitable but at least you do not directly inherit the problems associated with buying and managing real estate.
You do not have equity to make a cheap real estate purchase?
The issue of equity is essential in all the solutions developed in this article! However, Lica is there to find you a solution and give you the opportunity to invest even if you do not have the equity. Indeed, the advantage of a low-cost investment is that own funds are much less problematic. It is therefore quite possible to make a financial arrangement with which you will get funding for all of your real estate investment. Thus, you will not have any own funds to raise and you will be able to benefit immediately from your real estate yields.
The financing solutions offered by Lica combine different strategies. They allow everyone to meet their credit needs. Our strength therefore lies in our experience in combining these different solutions and thus obtaining the financing you want. Lica is an expert in the following areas:
- The personal loan
- Business credit
- income protection insurance
- The raise of creditworthiness
- the deleveraging
Our experts are always available to advise you individually and without obligation.
Our job is to provide you with solutions!
If you therefore wish to obtain financing quickly and realize your dream, you can submit your request without obligation by taking advantage of the services of Lica.
Start with a cheap real estate investment and grow quickly!
This type of “low cost” investment is ideal as a first investment in order to become known by financial institutions. In effect, obtaining your first loan is often complicated and restrictive. The banks don't know you yet. However, if all goes well with this first loan, the banks will be more open to granting you others and under better conditions, during future investments. Take advantage of the services ofa credit company it is therefore to guarantee you the highest acceptance rate in Switzerland to start your first investment projects.
Once your first property is purchased, you can then take advantage of the property returns to capitalize funds and repeat the operation more easily in the years to come.
Our conclusion on buying cheap real estate
The real estate markets in Switzerland and abroad offer diverse and varied low-cost opportunities. These opportunities are perfect in anticipation of larger investments in the future and are an excellent way to capitalize your equity and obtain advantageous conditions for a real estate investment in a main or secondary residence.
The earlier you start your first acquisitions, the more easily you will benefit from a profitability with which you would benefit from a significant leverage effect for your next acquisitions. To hope to live from its real estate returns, it is important to multiply the acquisitions while spreading its risks. Buying a first inexpensive property is therefore the first step to take to create a significant property portfolio!
Whatever your investment project, we recommend that you use our services for your funding. Our specialized teams are there to help you throughout the process and listen attentively to your project. Thus, by combining our different know-how, we can obtain the financing you want at the best market conditions.