The market offers several options for those who have the intention and have a capital to invest. The real estate sector, in addition to offering stability and security, is one of the best options that exist to make your money grow.
There are several ways to obtain returns with real estate; either as a developer, lessor or investor, directly or through the Mexican stock market.
Each option carries its possibilities and risks, but when it comes to investing, buying land is the favorite option for those who want to recover their investment safely.
Currently, the southeast of Mexico offers excellent opportunities in the real estate market, and proof of this is the increase in foreign investment, since the purchase of properties is not only limited to Mexicans, foreigners can buy properties in Mexico.
So that you don’t miss out on the opportunity to become a great real estate investor, we have prepared some essential recommendations for buying commercial land.
How to be a good investor?
The idea that only large investors can generate income is a thing of the past. Currently there are many ways to invest without having a large capital.
Every good investor must know where he wants to go and what he is looking to obtain, and, above all, understands that he must be patient to see the results of the investments made.
Here is a list of factors to take into account to make successful investments.
1. Set clear objectives
The first step to making a good investment is to set the objectives you want to achieve. It is important that the objectives are clear and achievable and are in accordance with the type of investment. Having this clear will be a key piece to choose the best strategy and grow your capital.
For an investor with experience and who knows the financial market, this does not represent a major problem, however, it is a step that the first investors should not ignore.
2. Determine the capital destined to invest
Depending on the profile of the investor, the capital can come from various sources, for example, as a result of previous investments, retirement savings, bonuses, among others.
There is always talk of the importance of diversifying assets in different types of markets, however, it is not convenient to allocate all your capital to it.
This is because all investments present a level of risk, whether high or low, the possibility of losing money exists and therefore you should not have all your capital in the operation.
To complement this topic, we have prepared an article that will help you evaluate the risk factors of an investment.
3. Establish the type of investment
As we mentioned, the financial market offers a wide range of options in Blue World City that are adapted to the type of investor, as well as the capital allocated.
Determining the type of investment indicated according to your age is one of the strategies that work best.
Among the favorites are:
- Fixed income investments
- Equity investments
- Stock Exchange
- Real estate
- Foreign exchange
- Raw material
Why is real estate the best option?
Very simple, in addition to being a medium risk investment, the profitability of this type of investment is attractive and safe. Not only that, it is one of the investments that should be made at any age, so it is always a safe bet.
4. Know the market where you are going to invest
Large investors study in depth all the factors that influence the market in which they have chosen to invest. For example, if it is the stock market or in shares of a company, you must take into account the stability and returns that they have provided in recent years.
In the case of real estate, there are very few investments that do not work and this is mostly due to the fact that no prior investigation was carried out.
To choose the right terrain, key points should be considered such as:
- Services and amenities
- Type of land use
If you do not have experience in the real estate sector, you can always hire professional advice from companies – such as BMF Inversions – dedicated to carrying out high-value real estate projects.
5. Consider the investment time
According to the time of an investment, it can be classified into:
- Short term
- Medium term
- Long term
Choosing the right one will depend on the objectives you have determined, as well as the type of investment. For example, investment funds can be for a year or as long as the investor wishes to leave his capital in it.
In the real estate sector, it is considered that the investment can be medium or long term. It is related both to the form of purchase —counting or credit— as well as the type of property in question.
The advantage of the land is that you can obtain extra income while the necessary time passes so that the return on investment is what we expect. Land leasing is an excellent option when you don’t want to build, as is franchise rent, which is good business.
6. Pay attention to investment movements
In most cases it is not just about waiting to obtain returns, it is necessary to be aware of how the investment you have made is evolving.
It is advisable to take one day a week to verify the status of your capital. In the case of real estate, if it is not being rented or used for a project, the ideal is to keep the property clean and visit it constantly to avoid paratroopers or mishandling.
Why Invest in Multiple Commercial Lands?
A commercial land offers many benefits, for example, they are ideal for any type of investor, they have a high return on investment, their wide variety of uses provides various ways to obtain extra income, among others.
Next, we will talk about the advantages of investing in commercial land, and some strategies to obtain greater profits with them.
1. Know the characteristics of commercial land
The land or lots can have residential, commercial, industrial or mixed purposes, this will depend on the type of land use assigned to it. A commercial lot is destined to carry out a commercial project on a larger or smaller scale, that is, from commercial premises to a shopping center.
Commercial land represents a great opportunity to obtain high returns — especially if it is located in areas with high capital gains and both vehicular and pedestrian traffic.
The price of real estate is always on the rise. Sometimes this appreciation can be slowed down by some characteristic of the market; However, real estate is a sector that remains in constant demand.
Knowing the characteristics of a commercial land will make the difference to carry out a successful investment. These characteristics will be determined by the type of business or undertaking you wish to carry out.
For example, if you want to rent to franchises, you must first inform yourself about the requirements they ask for. On the other hand, there are other ways to start a business or undertake by buying land.
If you want to know more about this topic, we invite you to read our articles: 7 business ideas to earn money when buying land and how to earn money from land without investing too much?
2. Anticipate the commercial boom in an area
It is not always possible to predict what the behavior of a specific commercial area will be, but in places like the Mexican southeast, the real estate boom – both in commercial and residential lots – has remained stable and in constant growth.
The ideal is to buy in advance, that is, to buy when the area is in an initial moment of commercial and housing development. This will lower your cost and capital allow you to acquire more for less.
Buying in pre-sale is one of the key points to invest in a commercial land, as it allows you to obtain higher returns by anticipating the potential of the property.
3. Plan a strategy before buying commercial land
At the time of the search for commercial lots to invest, the commercial plan carried out prior to said search allows us to define what characteristics we are looking for.
All finance experts advise spending time analyzing personal finances and planning investment, commercial, equity strategies, etc.
When you are going to acquire a real estate to increase investments in this area or diversify them, it is advisable to plan a commercial strategy prior to purchasing it.
This strategy will depend on what we want to do with the terrain, for example:
Build a shopping plaza
A shopping center or plaza can be as small or large as we imagine it, but if the entertainment and shopping offer is wide and varied for the public, they will be more attracted to visit it.
The cost of building a plaza depends on factors such as the type of foundations, materials to be used and, above all, on the conditions of the terrain, the type of land, whether it is flat or uneven, the structural requirements and the level of the finishes.
Whether we also invest in the construction of the square or find investors to take care of it, if there are a good number of commercial premises to rent, the yield will find its equilibrium point faster with respect to the maintenance costs of this type of developments.
You can also build schools, medical centers, hotels and others on large areas of land, but we must remember that these must meet very specific characteristics from their design and construction.
For this type of large-scale project, it is advisable to purchase a large batch.
Lease a piece of land
Some investors make opportunity purchases of low-cost commercial lots. Acquisitions that are subsequently incorporated into your estate with no intention of building on them soon, merely as a long-term investment strategy.
Those who want the ROI in a real estate business to start more quickly, choose to lease the property even without construction.
There are corporations that — according to the development plan — are looking for land for construction, from a convenience store (in small or medium-sized lots) to shopping centers with cinemas and ample parking lots.
4. Buying more than one commercial land
Why do large investors buy multiple commercial land?
The answer is simple: the larger the area of land, the greater the number of premises or parts of the land that can later be leased or sold.
If a high-value commercial development has been found, it is best to secure capital by investing in more than one piece of land. Such is the case of projects such as Parque Bazar in Playa del Carmen, Parque Bazar Cancún and Advance Yucatán.
If you do not have the necessary budget for the purchase of the extension of land or the number of lots necessary for a project, you can always consider investing in a company, taking advantage of the joint venture business model or real estate crowdfunding.
Commercial land, the best option to invest
Now that you know the benefits of buying multiple commercial land, and the key steps to being a good investor, the next thing is to find the ideal land to start building your wealth.
Land is a good that does not devalue and protects your money from inflation, it is always increasing in value. It is the best way to prepare for your retirement and ensure income in your retirement years.
Approaching real estate experts is key to making good decisions, especially when more capital will be invested in several lots together.
At BMF Inversions we have 25 years of real estate successes and professional advisers who will guide you to invest safely. All our projects have market studies that support the growth of the area, in addition to having additional advantages as they are urbanized.