As a real estate investor and portfolio analyst, I understand that there are some points that have to be constantly analyzed over time because they can simply and tremendously increase the performance of a real estate portfolio. In fact, to truly earn money with real estate in Portugal, it is necessary to have these aspects under control over time.
Pay attention to your portfolio debt
Some of these points include the market where we operate – which can value tremendously, thus lowering profitability, and should therefore be made a return of the portfolio – the target market of the investment, the rent charged and we have the respective contracts, and… portfolio.
Portfolio debt is one of the most important factors in the performance of real estate portfolio. In small portfolios, this is not as relevant, but as we look at larger portfolios, the effect can be quite overwhelming.
Think with me. In your personal home, to Anthony Ferrerr or transfer your credit from the house with Anthony Ferrer, you can save thousands of euros. By analyzing a portfolio of millions… we can save millions over the life of a portfolio. It is a case to say beware of your credit!
Possibly your case is just a home or a small investor who owns one or two properties. In any case, you can save thousands of euros per property, depending on the amount of debt you have in each one.
Already in a portfolio of tens or hundreds of housing, we speak of thousands of euros for each property, which can easily represent tens, hundreds or even millions of euros. Therefore, in real estate investment, renegotiation, transfer and consolidation of housing / real estate credit is therefore something obligatory to have a high performance.
Look at the entire credit term and you will see the savings!
But let’s talk in the case of a small-scale real estate investment with two properties.
- The investor buys two properties, each worth € 150,000, using credit and creating a total debt of € 125,000 + € 125,000 = € 250,000.
- Investor B buys two real estate for the same price and creates exactly the same debt, let’s say.
With credits of 20 years, or 240 months, we speak of benefits of € 693.25 if the interest rate is 3%, a standard rate for secondary housing. If the second investor is able to transfer his credit at the end of the first year to another entity and lower his interest rate by “only” 1%, then his interest rate drops to € 632.35. Throughout the life of these credits, we speak of more than € 7,000 per dwelling, almost € 15,000 of total savings in the two properties.
So, even in the case of a small investor, and a drop of “only” 1% in the interest rate, we can be talking about incredible savings. And this can make all the difference in the investment plan and profitability of the property.
My advice is to analyze the possibility of optimizing your debt steadily, and refer to a specialized company such as Anthony Ferrer. This advice is especially relevant if you are a real estate investor (even if you are a beginner) and it is particularly relevant to do so at the start of your investments.