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You frequently hear about people who made their fortunes investing in the stock market, but you also hear about investors who lost their shirts playing the same game. You hardly ever hear about overseas real-estate investors who go bankrupt, however; that’s because it doesn’t happen often – at least not in Portugal investments.

That’s right: Those individuals who invested wisely in real estate many years ago are living a very comfortable lifestyle. Investing in real estate can garner interesting returns, so if you’re just getting started or have considered investing in real estate, the information that follows is invaluable.

Take the Risk
No one hears about how much money one can make investing in real estate in Portugal. That’s probably because it is a well-kept secret. If everyone knew about it, everyone would be doing it, right? Wrong. Much like starting your own business, investing in real estate requires entrepreneurial skills and a vision, which is why not everyone is jumping on the real-estate bandwagon.

In fact, most people aren’t willing to take the risk that real-estate investing entails; fortunately, these are the same people that will make you rich by renting from you. The little secret is that there are hundreds of individuals who procrastinate for every one individual who has a vision and chooses to take the risk.

What Lies Ahead?
Investing in real estate in Portugal requires a lot of time; you need to deal with a vast array of tenants — good ones as well as bad. Just like a business, you also have to deal with operating and fixed expenses, such as heating bills and renovation costs.

On the other hand, you don’t have to wear a suit all day and run around doing someone else’s bidding. Your dress code can consist of shorts and a shirt six months out of the year.
If you want to go out of town for a few days, you can. You don’t have to ask for vacation time. While you are out of town, your rents keep ticking away 24 hours a day, seven days a week, whether you’re on the job or not. And those loans keep amortizing. The magic is happening just the same.

There are plenty of benefits in real estate…

The Benefits
Aside from being your own boss, having the freedom to travel while earning profits, increasing your net worth, and having a place of your own to call home, investing in real estate holds even more benefits.

Cash flow
Cash flow is the difference between your income and your expenses on a piece of property. You can have a positive or negative cash flow. Obviously, you’ll feel a lot better if the cash flow is positive. A little advice on cash flow: Never use all of your positive cash flow for rapid debt reduction. You will be walking a thin line. By keeping a strong positive cash flow, you will have more options and space to manoeuvre.

Appreciation
Appreciation is the increase in value of a property. There are two kinds of appreciation. The first is from economic conditions beyond your control, such as inflation. But you won’t gain much from this type of appreciation since the gain is offset by the higher cost of living.
The second kind is market appreciation, which you can control. When you improve a property (through renovations), you force its value higher. You can purchase a piece of property in need of repairs and bring it back up to neighbourhood standards or slightly higher; this will give you a property that is much higher in value.

Leverage
Leverage is the ability to borrow a percentage of the value of a piece of property. Real estate, in comparison to other investments, offers a very high degree of leverage. In most of the cases, a couple buying a Portugal home can obtain 75% financing. This allows individuals to purchase real estate with little, of their own money. What other investments offer such a high degree of leverage?

Amortization
With leverage, or the use of other people’s money, comes a repayment schedule. Your outstanding balance is reduced with every payment you make. Part of each payment goes to interest (applied first) and the rest goes to pay off the principal. The principal reduction is called amortization — reducing debt. Hence, amortization can make you wealthy, slowly and steadily.

Tax Advantages
Owning real estate in Portugal with the goal of making a profit allows you to deduct interest payments and other expenses come tax time. But don’t be fooled into buying real estate for the tax advantages; rather, purchase it because it makes economic sense to do so.

Benefits of Buying
Owning overseas real-estate is a great way to achieve your financial freedom. The benefits are definitely there. The real estate agency Villas Luz, Lda. is here to help get you started.
For more informations please visit our websites Properties in the Silver Coast and Properties in Algarve