Research confirms: investing in real estate is more profitable than making financial investments
A study carried out by the EPO Group and Fundação Dom Cabral shows that betting on the real estate market brings greater advantages than investments such as savings, CDI or shares
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A survey confirmed what the Belo Horizonte real estate market has been defending for some time: investing in real estate is more profitable than investing in savings accounts, CDI or even a stock portfolio represented by the Bovespa index (Ibovespa). The survey, carried out by the EPO Group in partnership with Fundação Dom Cabral (FDC), compared the rate of return on investment in the BH real estate market with the performance of the main financial investments, considering the period between January 2009 and December 2013. The result pointed out that real estate yield is the most attractive, with a 77% appreciation rate, higher than the second-place CDI, with 57.7%. Savings reached 37.8%, slightly above the Ibovespa, with 37.2%.
As the rate of return on investment in property was evaluated considering not only the appreciation of the property, but also the gains obtained from the rent, the profitability could be even higher, reaching 106.5%. For Patrícia Becker, project manager at FDC, this is a historical analysis of some investment sources, in which the return on the real estate market was better. “Various types of analysis have already been carried out, but for this purpose, it was the first time”, says the specialist.
According to Marcelo Carvalho, commercial manager of the EPO Group, the idea is to repeat the survey every year. "If, this time, we consider starting in 2009, next year we will do the period from 2010 to 2015. Thus, we will always have the behavior of the last five years", he says.
The data referring to the evolution of real estate prices were taken from the Economic, Administrative and Accounting Research Institute (Ipead) of the Federal University of Minas Gerais (UFMG), in the “Research Construction and Commercialization: Belo Horizonte Real Estate Market”. For the calculation, the average sale value (R$/m²), the average rent value (R$/m²) and the average rent profitability (%) of commercial rooms and commercial floors in luxury neighborhoods of the City. As a reference, the price index in the Center-South region was used. For Carvalho, another important piece of data from the research is the average rent with which they work today, corresponding to 0.45% of the property's value. "This is the price that is being practiced, now that the market has stabilized."
And the gain can be even greater for those who buy in the pre-launch of an enterprise. According to Pedro Damásio, partner at Talent Construtora, who has already sold 60% of MedCare, an exclusive commercial building for the healthcare area in Vila da Serra, in addition to earning from the valuation of the property and from the rent, if he chooses to lease the property, the investor who prefers real estate can still earn the difference in the value with which he bought and with which he reached the market. “Whoever buys a property still under construction pays a lower price”, he explains. According to the builder, every project is launched with a profit margin, but during the work the table goes up because the price is being adjusted.
Pedro clearly sees two profiles of investors: one buys the property in the pre-launch and sells it as soon as it is ready, profiting from the difference between what he invested back there and what the property is worth with the delivery of the keys. Another buys, earns the same difference and also profits from the rent. To escape from a maximum income tax rate, which would be levied on the amount received for rent, there are investors who even set up companies just to operate this type of extra revenue. “The tax, in this case, is less than half, depending on the tax regime of each company”, he says.