Have you ever thought about increasing equity by investing in real estate? The real estate market is heated, registering records in sales. To give you an idea, the sum of sales in June, July and August 2020 was 45.7% higher than in the same period in 2019, according to the Brazilian Association of Real Estate Developers (ABRAINC).
Many people are taking advantage of the current low interest mortgage scenario to buy their own home. With the increase in buyers, the moment becomes opportune for those on the other side of the counter, selling.
What is equity?
Do you know what your net worth is? How is it evolving year by year? What are you doing to increase it? Before even talking about investing in real estate, it is necessary to understand what equity is. It is the first step in organizing personal finances.
Equity is the value of everything you have (assets), minus what you owe (liabilities). With it, it is possible to monitor the financial evolution and make plans to monetize money.
Here is an example of how to calculate equity:
Home: BRL 500,000.00
Car: BRL 40,000.00
Balance in investments (CDB, savings, private pension, shares, among others): BRL 150,000.00
Balance in checking account: BRL 10,000.00
Total assets: BRL 700,000.00
Outstanding balance on home financing: R$ 40,000.00 Outstanding
balance on car financing: R$ 20,000.00 Outstanding
balance on credit cards: R$ 10,000.00 Outstanding
balance of bills (water, energy, among others): R $5,000.00
Total liabilities: R$75,000.00
Okay, now let’s go to the balance equation:
Equity = Assets – Liabilities.
Equity = BRL 700,000.00 – BRL 75,000.00 = BRL 625,000.00
Tips to start investing in real estate
Now that you have knowledge of equity, you can make plans to increase profitability. Buying real estate, for example, with the aim of making a profit is a good investment in the current scenario of lower interest rates.
Data from the Brazilian Association of Real Estate Developers (ABRAINC) show that real estate sales grew in 2020. According to the entity, 13,156 residential units were traded in the country in August 2020, an increase of 58.9% compared to the same period. in 2019. A new record since May 2014.
Investment in real estate can be summarized in the following strategies for profitability:
1. Buy a property and rent it for rent;
2. Buy a property in the plant to resell;
3. Buy a property to renovate and resell for a higher price.
Neighborhoods with potential for appreciation
The first criterion to be observed in a property is location. It is important to look for neighborhoods with potential for recovery. An example is the region of Lapa, west of São Paulo, which is undergoing full transformation with the Pirituba-Lapa road link project. This is the construction of a new bridge over Tietê, which will facilitate the interconnection of neighborhoods on the north bank of the river with regions such as Lapa, Vila Anastácio, Barra Funda and Perdizes.
This urban operation takes place at an important moment in the development of this area of the city, with the arrival of projects that propose new ways of living in the metropolis.
One of them is Elo Caminhos da Lapa, a project by Tegra Incorporadora. With flexible and modern floor plans, and a complete leisure structure, it will be served by the first Rua Jardim de São Paulo, a totally reurbanized street, about 1,200 m long, comprising lush landscaping, cycle lanes and cycle paths, underground wiring, duplication of the via and infrastructure for leisure and convenience.
Construction Company and architecture can add value to property
The architecture and the developer or builder behind the project can also influence the property’s valuation. Therefore, it is essential to look for the company’s history before closing the deal.
Time on the market is one of the best factors to know if a company is trustworthy, if it is reputable, certified and has recognized awards by institutions that assess the sector.
It is also important to know the quality of the properties offered by the company and see the architectural work up close, visiting a completed unit.
When choosing, invest in units that have architecture and design as one of their differentials, as, in addition to being an attraction, it helps to enhance the property’s value.
Compact apartments, for example, are an excellent opportunity in more upscale neighborhoods. With a lower initial investment, compared to properties with three or more bedrooms, the current architectural projects meet a new reality of living and working, with modern spaces for services and leisure – such as the 25m² Quad Studios, a Tegra development Developer.