A yielding property, a well-known and well-known term in the real estate market, has become a buzzword in recent years also among private investors, and much thanks to the low interest rates in the economy and the constant search for investment alternatives.
Yair Levy lists the three things that are most important to check when others are considering purchasing income-generating properties
A yielding property is actually any property for which, from the moment of its purchase, rent can be received. It can be: shops, offices, commercial centers, industrial plants, logistics warehouses, or an apartment. The biggest and most common mistake among investors is to examine the feasibility of investing in a yielding asset based only on the yield. This is a mistake since the yield only gives us a partial picture, and in most cases, if we do not examine additional factors, we will value the property more than its true value. If so, what should be checked when considering an investment in a yielding property? 1. The real return on the property, today and in the future – does it reflect the market prices, or is the rent higher than usual in the area and will decrease when the contract is renewed? 2. Horstility of the property, its use and suitability for a variety of customers – is it possible to divide it? Does its use exceed the limits and will result in fines and fines? And will future construction plans in the area harm the yield? 3. What is the construction value of the property – i.e. how much will it actually cost to build a new property that meets the same criteria? As in everything, before taking a fundamental step, you need to study the subject and be aware of the big picture, and you must not forget that we live in an era with many and frequent changes, which makes looking to the future all the more important.
