by Jesus Barrena 
In this article I will explain how invest in real estate for retirement. Although investing in a property can be an interesting option at the moment if we take into account the profitability of the rental.
It is essential to choose the city and the area to invest well if we do not want our investment to generate losses in terms of profitability.
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What alternatives exist?
Not always the best alternative to invest in real estate has to be housing. In the market and depending on the needs of the investor, there are different alternatives that may be more interesting depending on our investor profile.
In the event that the investment is intended for the long term, as is the case of acquiring a property with the aim of guaranteeing financial support in retirement. Even if this remains for our children, there are different investment options in real estate.
Alternatives to buying a home outright
Invest in real estate investment funds
An alternative for those who want to have a presence in the real estate sector in their investments are investment funds.
La investment in the sector it can be done in two ways:
The funds that invest directly in real estate assets intended for rental and that is why they do not have to follow the same trend as the rest of the financial funds.
Another way is based on the investment of indirect real estate funds, they are those that select securities that are related in one way or another to companies in the real estate sector.
A great advantage of real estate investment funds is the diversification of the portfolio. This allows to be positioned in different assets from different parts of the world at the same time, and this is a considerable advantage compared to buying a property, which means having to risk it everything practically a letter and trust that the area we have chosen is profitable, given and amount of investment.
Invest in SOCIMIS
Another of the investment options in the real estate market are listed companies that base their business on the purchase, promotion and rehabilitation of urban assets that are usually used for rent, the socimis.
They are a collective investment vehicle that lies between the funds and the real estate companies.
They allow their participants to be present in the housing market without having to bet all their money on a specific asset, the purchase of a property. Also without being conditioned by their lack of liquidity.
This format is based on REITs (Real Estate Investmen Trust) born in the US from the sixties.
For a company to be considered a socimi, it must meet certain parameters, have at least a portfolio of real estate, these can be homes, offices, commercial premises, warehouses..., 80% of which is intended for rent. They have the legal obligation to pay their shareholders every year.
They must distribute 80% of the dividends obtained through rental income, and 50% of the profit from the sale of real estate, as well as 100% of the profit obtained through dividends from participation in other socimis.
It is very interesting that for investors who invest in the real estate market looking for periodic, monthly income, these can be obtained through dividends and not necessarily by buying a home to rent it.
In the Spanish market there are more than 60 socimis that are listed on the continuous market and on the Alternative Stock Market (MAB). The largest and most well-known are Merlin Properties or Colonial.
Invest in real estate crowdfunding
In recent years, new forms of real estate investment have been added. One of them, increasingly well known, is crowdfunding, which allows investors to collectively finance business projects through capital contributions with which they obtain in exchange shares of the company in charge of the project.
Real estate crowdfunding works as a system of small investments focused on the real estate sector through different platforms that are responsible for selecting and executing the investments.
Normally they buy real estate in large cities that they reform and later sell in the market itself.
To obtain financing, a limited company is usually created once the project in which they want to invest has been identified.
It is in this company in which the investor deposits his money, which entitles him to a share and, once the profits have been generated, the platform is in charge of distributing them among all its investors.
Platforms:
Some of the best-known real estate crowdfunding platforms in the real estate market are the Spanish Housers, Estateguru, Crowdestate or Bulskestate. These register average returns for projects of over 10%. It is an investment formula that anyone can access (since it can be done through the internet with a small participation of 50 or 100 euros, some from less).
Remember that it is a method that involves significant risks for the investor, so it is necessary to carefully analyze the project in which it is invested.
Investing in real estate, directly in housing, or in any way, implies a series of risks that it is important to know and assume if we do not want to risk all our assets.
How can a personal finance advisor help you? It will guide you depending on your personal financial situation, which are the best options to achieve your goals in the medium and long term, you will have a clear financial plan.
To finally say that if you are the owner of a property, you always have the possibility of converting it into liquidity, maintaining ownership, through the reverse mortgage.
