Which type of housing is better to choose for investment in 2025?

What Type of Housing is Best to Choose for Investment?

Investing in real estate is one of the most popular ways to preserve and increase capital. However, before purchasing a property for investment, it is important to understand what type of housing will provide maximum profitability and liquidity. In this article, we will look at the key aspects that will help you make the right choice.

Main Types of Housing for Investment

Before buying property for rent or resale, you need to consider different types of properties, each of which has its own advantages and disadvantages. The choice depends on your goals, available budget, and expected profitability.

• Apartments — the most liquid type of real estate. Many people rent apartments for long-term living or short-term rentals. Places with high tourist appeal and developed infrastructure ensure high rental demand.
• Houses — a longer payback period, but they can provide high rental income, especially if located in prestigious areas or popular resorts.
• Commercial real estate — a profitable choice for large investors looking for stable income. However, such a property may require more maintenance and upkeep costs.
• Real estate with short-term rental rights — ideal for tourist regions. However, this will require additional efforts to manage the property, such as marketing, cleaning, and maintaining good reviews.

Key Factors Influencing the Choice of Housing for Investment

In order for real estate investments to bring maximum profit, it is necessary to take into account several factors, such as the liquidity of the property, profitability, maintenance costs, and potential growth in real estate prices.

• Liquidity — the ability to quickly sell or rent out a property. Apartments and small houses in large cities usually have high liquidity.
• Rental yield — this is the regular income from renting out the property. If you plan to rent out housing, it is important to evaluate the potential profitability, taking into account maintenance costs and taxes.
• Prospects for price growth — buying property in developing areas can provide significant capital growth in the future.
• Condition of the property — newer and well-maintained properties require less repair and maintenance costs, which increases your profit.

How to Calculate the Return on Investment?

One of the main questions that investors ask themselves is the profitability of real estate. You can calculate the return on rent using the following formula:

Profitability = (net rental income / property value) x 100

In the calculation process, it is necessary to take into account all costs: the purchase of real estate, possible repairs, taxes, maintenance, and property management costs. In addition, it is important to take into account the possible revaluation of the property and potential losses upon its sale.

Best Locations for Investment in 2025

The location of the property plays a key role in its liquidity and profitability. In 2025, it is worth paying attention to the following cities and regions that will provide a stable demand for rent:

• Madrid — the capital of Spain with high real estate prices, but also with high rental yields.
• Barcelona — a popular tourist center with high liquidity and rental yields.
• Valencia — a developing city with attractive real estate prices and a large number of tenants.
• Malaga — a center of elite recreation and prestigious residential complexes, popular among wealthy clients.
• Alicante — an actively developing region with high rental yields, especially in tourist areas.

Main Risks When Investing in Housing

As with any type of investment, buying property involves risks. The most significant are:

• Illiquidity — if you need to quickly sell the property, it may take a long time, especially if the property is located in less popular areas.
• Risks of non-payment by tenants — possible problems with receiving regular rental income.
• Need for repairs — the costs of maintaining the condition of the property can become a significant additional expense.

How to Choose the Best Type of Housing for Investment?

When choosing a property for investment, it is important to focus on several factors:

• Your financial goals — do you want to receive a stable income or are you counting on long-term capital growth?
• Technical condition of the property — minimizing repair and maintenance costs can significantly affect your profitability.
• Real estate market in the chosen region — pay attention to cities with high growth rates and stable rental demand.

Investing in real estate requires a balanced approach and careful analysis. Consider all aspects before buying to make your investment profitable and liquid.