3 Reasons Why Buying an Algarve Investment Property Is a Great Way to Build Your Net Worth
Whether you have a family, recently graduated from university or are getting close to retirement, it’s more than probable that you have given at least some thought as to how you can enhance your net worth.
You may have already invested in stocks, bought a few investment bonds or already have a plan set up to finance your retirement. Maybe you have considered buying real estate as part of your financial portfolio.
In today’s blog post we’ll have a look at three reasons why buying Algarve real estate for investment is one of the most effective ways to grow your overall net worth.
Reason #1: It Generates a Second Income
One of the most important reasons to purchase real estate as part of your investment portfolio is that it can generate a second income in the form of rentals. Whether you buy a top-notch villa or a simple apartment in a condominium, you will almost certainly find interested holidaymakers or long-term renters who would take up any offers.
For the most part, the rent you receive each month will easily cover the costs of owning and operating the property. Anything above this is your second income which will continue to build over time.
Even if you decide to rent for just part of the year and spend the rest of the time holidaying with yourself and your families, the rental payments should cover at least the mortgage payments and running of the property. So in effect, you are getting others to buy the property you will eventually own.
Reason #2: It Almost Certainly will Increase In Value Over Time
Another top reason to invest in Algarve real estate is that in almost every case, it will increase in value over time. As long as you concentrate on maintaining the property and keep investing in its upkeep you have a guarantee in the coming years the value will rise, and should you decide to sell the profit is yours.
Keep in mind that at times real estate is volatile and that it’s not always going to be the right time to sell and realise your gains.
Reason #3: Leverage Equity To Buy More Algarve Properties
Finally, our third reason that Algarve real estate is a great way to build your net worth is your ability to use it as leverage to purchase more real estate in the future.
For example, let’s say you decide to purchase a house valued at €200,000 as an investment property over a 10-year period. Paying the mortgage and upkeep with rental income.
Once the 10-year mortgage on that property has been paid off, you have an asset valued at €200,000, plus the value it has risen by, that you can then borrow against. So you could go out and acquire another €200,000+ property without having to sell the first. As you can imagine, this can work quite nicely over time.
Learn More About Investing in Algarve Properties
If you are interested in learning more about Algarve real estate as an investment and how you can make use of mortgage financing to purchase properties, give our offices a call. We are happy to share our local insight and expertise as well as advise you on the best mortgage products available to help reach your financial goals.