It's no secret that The real estate industry in Mexico is attracting more and more investors and companies. due to its high profit margins and constant growth.
If you are one of them, You need to master certain concepts that will allow you to thoroughly understand all aspects of the sector., just as the meaning of real estate capital gains.
The concept of surplus value is broad and is of utmost importance when choosing between a real estate development or other. That's why we created this guide, to help you analyze and make informed decisions about the different properties you have on your radar.
What is real estate capital gains?
The real estate capital gains This is when the value of a property increases over a certain period. due to criteria such as location, building structure, demand, economy, surrounding properties, as well as its aesthetic and functional value.
It is worth noting that all types of properties such as houses, apartments, buildings, corporate centers, commercial and residential premises, and even investments in stocks, They may experience an increase in their capital gains.
Types of capital gains real estate
If you want to invest wisely and make the most of your available capital, you need to carefully investigate the types of property appreciation, which are:
- Urban capital gains: It refers to the increase in property value over time thanks to factors related to an urban environment such as new infrastructure, communication routes and accessibility, or economic growth.
- Commercial capital gains: It is the increase in value of a commercial property with high potential as an asset. Factors such as proximity to business centers and the need for business space drive up the property's value.
- Social surplus value: It is related to community and social development. The construction of parks, medical centers, and educational institutions promotes an increase in property prices.
- Industrial surplus value: It is the increase in the price of a property associated with the areas of manufacturing, industry and logistics.
- Natural capital gains: It includes natural factors, ecosystems, and geographical resources that represent an attraction for properties without being related to improvements in the building and that increase their price.
- Capital gains from property improvements: This occurs when the buyer makes significant renovations, applications, and modifications to the property with the aim of increasing its value.
- Capital gains from urban development: It is generated from the construction of new residential and commercial buildings that respond to a demand for expansion in urban areas.
Factors that determine the appreciation of real estate
If you are interested in investing in real estate, It is important to consider what factors increase the value of properties, regardless of the type of development they are.
Next, We list the factors that influence the appreciation of a property:
1. Accessibility
The level of connectivity that a house or apartment has with roads that facilitate access to main services such as clinics, hospitals, educational or sports centers increases the value of a property.
At this point, Ease of access to workplaces is also taken into account., corporate offices, shopping centers, and entertainment areas such as parks and museums.
Similarly, accessibility is a key aspect that is of great importance to users, because it makes daily activities easier and is directly related to quality of life.
2. Security level
One of the elements that determines the increase in value of a property is the quality of their security systems.
Residential properties that feature 24-hour security, controlled access, security cameras, and good lighting (like the properties in our portfolio), They represent a real estate investment with high added value.
Keep in mind that a good level of security is paramount for everyone because it reduces risks, which is why it is taken into account when calculating the market value of a property.
3. High demand for properties
Buyers prefer goods that are close to business centers and places of interest, That is why some areas have a higher demand for properties than others, as they are strategic.
So the value of a property is also subject to supply and demand in the construction area.
4. Urban development
If you want to make a good investment, It is advisable to evaluate properties located in an area with high growth potential (planned).
Urban development is a variable that has a direct influence on the value of the property, for that reason Your advisor should guide you on the projects in development. around the area where you want to invest.
And what types of buildings are part of the planned growth? Schools, sports complexes, shopping centers, corporate offices, entertainment venues, restaurants, museums, parks, medical institutions, among others.
5. Basic services
In the real estate sector, public and private services are taken into account as a factor that determines the added value of a house.
Because of this, Investors are increasingly choosing to invest in projects very close to mixed-use developments. (business parks, residential complexes, logistics spaces and health centers).
6. Economic and legal factors
The state of the economy and factors such as inflation and interest rates affect the appreciation of a property, since They have an impact on the perception of a property in the real estate market.
Similarly, fluctuations in taxes and changes in legislation and regulations in the construction industry These are factors that directly affect the asset's price.
How to calculate real estate capital gains?
To calculate the capital gains in the real estate sales, Take the current price of the property and subtract the initial purchase price. Next, divide the result by the purchase price and multiply by 100 to get the appreciation rate.
You can use the following formula: ( (Final value – Initial value) / Initial value) x 100
Let's look at an example. Imagine that 5 years ago you bought a piece of land for 1.5 million. But now you discover that your land is valued at 3.5 million. So, using the formula, it would look like this:
((3,500,000-1,500,000) / 1,500,000) x 100 = 133%
That means the property increased in value by 133% compared to the price you bought it for.
Understanding how to calculate it will help you know the real value of the asset., which is essential to have an estimate of the profits you will obtain from the transaction.
On the other hand, calculating capital gains allows you to know if the property you are interested in will actually increase in value over time or not.
How to increase the value of your property?
To increase the value of the property, it is recommended that you choose a good location, optimize the electrical, gas and water installations, improve its architectural quality, increase security and surveillance and carry out preventive maintenance.
It is worth noting that These tips apply to any building, Whether it's a new or used house, if you want to sell a property for a better price than you bought it for, it's advisable to consider the following recommendations:
- Analyze the external factors: Urban infrastructure, connectivity, accessibility, and the demand in the area are external elements that influence the value of a property.
- Choose a good location: Areas with high demand, safety, and growth potential allow you to set a higher price for the property.
- Perform property maintenance: The property must project a solid appearance, both in aesthetics and in construction quality; for this reason, it requires constant maintenance in details such as pipes, electrical installations, green areas, walls, ceilings, floors, and finishes.
- Make changes: Such as redistributing the layout of a house or apartment, adding extra space, or redesigning its design. Remodeling directly influences the price when selling the property.
- Adapt to current trends: In this way you can be an attractive option for buyers who have specific interests such as modern spaces, cutting-edge architecture, open or sustainable concepts.
Invest in an asset with constant growth and high potential for appreciation.
The real estate sector offers you a highly stable source of income through investments in various developments, regardless of your capital; you can start today if you wish.
At Proyectos 253 we advise those looking for high-end residential and commercial projects real estate capital gains And we have strategic alliances with other developers to offer you multiple options. So if you're interested in this sector, contact us.
