As an example, what happened in the last year is enough. In 2020, inflation was 36%, the dollar appreciated 41% in its official price and up to 89% according to the average of financial exchange rates, but the local stock market experienced a decline of 35% in hard currency.
The Real Estate market, for its part, offers investment opportunities with profitability rates in dollars in many cases higher than 30% for projects that are just beginning. These returns clearly show why we can argue that bricks and, especially, quality projects (less elastic to macroeconomic swings) were and will continue to be an excellent option.
Another advantage of Real Estate is that it offers diverse alternatives. Those who want higher profitability will be able to enter a project in its initial stages (“well”), even when looking for a “exit strategy” in the medium term. But, for those who only pursue the objective of protecting the value of their savings, the option of investing in real estate already completed is extremely useful.
In summary, real estate offers the security of value protection and the possibility of obtaining profitability margins that are very difficult to achieve with other types of assets such as financial ones, generally exposed to high volatility typical of a more speculative market. For example, in the Stock Market it is possible to suffer large capital losses in a very short time, something very rare in real estate investments.
Within the vast range of options when investing in Real Estate, the residential market is, without a doubt, the segment that offers the greatest opportunities since there are others (such as offices) that are being “rethought” because of the current conjuncture caused by the pandemic. Housing is a product that will always be current, especially those developments that offer a lifestyle that prioritizes caring for the environment and connecting with increasingly valued green spaces.
Whatever the objective that is sought when investing in a property, the experience, the knowledge of the market and the product, but fundamentally the strength of the developer, make the difference. In each neighborhood or area there are companies that can provide tangible examples of their works, allowing the different options to be compared.
As in any investment, each proposal must be analyzed well, being of vital importance the trajectory of the company to whom you are going to entrust your money. In our sector this is even more important since, in the case of investing from the well, it is not only about depositing money, but also trust.
Partner and Director of Administration of Azcuy.
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