Investing in housing in the capital is possible either in case of urgent need, or because of an excessive surplus of money Experts analyzed housing prices in the regions of Russia. And they determined in which city it is most profitable to buy an apartment for its subsequent lease. The results of the study were, to put it mildly, unpredictable. It turned out that it is worth staying away from both "northern" capitals. The further south, the more reliable.
The specialists used in their calculations the indicators of average apartment prices and average rental rates in 69 largest cities of the country. To determine the profitability and payback of housing, its cost was compared with the average annual rental income.
If you have a desire to make money, you need to go to Krasnodar. This southern, albeit not a resort town, is home to the most profitable apartments. According to the federal portal World of Apartments, rent in Krasnodar can generate 8.4% per annum. Simply put, it is enough to rent out a house within 12 years - and you will fully recoup it. High profitability was recorded in Krasnoyarsk and the Leningrad region - 8.1% and 8%, respectively. Saratov is in 4th place - 7.7%. Simferopol closes the top five with 7.5%.
By the summer in Krasnodar, the ratio of the cost of supply (3 million rubles) and rent (21.5 thousand rubles per month), which was optimal among the largest cities in the country, had been established, says Pavel Lutsenko, General Director of the portal. - By the beginning of the holiday season, rental rates increased by 2-4%, while the cost of sales since the beginning of the year went negative - by 2.4%.
Rental rates have also increased in other southern cities, but this did not have a significant impact on profitability, since the average cost of apartments there is significantly higher. For example, in Simferopol, which is ranked 5th, the price tag of an average apartment is 4.4 million rubles at a rental rate of 27.2 rubles. per month. In Sevastopol, the average apartment prices are slightly higher than those in Simferopol (4.6 million rubles), and the average rates are slightly lower (26.1 thousand rubles per month), which ultimately gives 6.9% per annum. In Sochi, the yield is even lower (6.3%), since the cost of an apartment in a popular resort has reached almost 6 million rubles. It is clear that the profitability here will be lower even at high rental rates (31.4 thousand rubles per month).
Now - about the most disadvantageous apartments in terms of generating income. The worst is investment in Cheboksary housing. With a relatively expensive cost (2.3 million rubles), the average rent here is only 8.7 thousand rubles per month, so the maximum yield reaches 4.6%. A very similar situation in Saransk: the cost of the proposal is 2.4 million rubles, the average rates are 9.1 rubles per month, the yield is the same 4.6%. The third from the end of the list is Belgorod with 4.9%, followed by Orel (5%).
And, finally, a sensation. Moscow closes the top five of the most unprofitable housing, where the profitability of an apartment is 5.1% per annum. Now in the capital, an average apartment, excluding the elite segment, costs 10.5 million rubles, and is rented out for 44.8 rubles a month.
Moscow regularly turns out to be an outsider due to prohibitively high housing prices, says Pavel Lutsenko. “Even rental rates, which are several times higher than the average in Russia, do not help the situation. By the way, last year the profitability of apartments in the capital was even lower - 3.7% and was the lowest in the country.
And how much is it in years?
The average profitability of apartments in Russia is 6.3%, the average payback period is 16.3 years (these figures practically did not change over the year). For about this period, you can "recapture" housing in Tula (16.2 years) or in Nizhny Novgorod (16.4 years).
It is most profitable to invest in the cities with the highest rate of return. It is possible to return funds spent on real estate in Krasnodar in 11.9 years, Krasnoyarsk in 12.4 years, in the Leningrad Region in 12.5 years, in Saratov in 13 years, in Simferopol, Makhachkala and Astrakhan in 13 ,4 years.
The longest return on investment will be in Cheboksary - 21.8 years, in Saransk - 21.6 years, in Belgorod - 20.2 years, in Orel - 20.1 years. A Moscow apartment will start generating income in 19.4 years on average.
The figures obtained are the most optimistic option. In reality, the real payback period for an average apartment will be even longer, - warns Pavel Lutsenko. - As already mentioned, the indicators largely depend on the season: business, vacation, holiday, etc. In the resorts, the main peak of delivery falls on 4-5 hot months, the rest of the time housing is mostly idle. And in other cities, an average apartment can be left without tenants for a couple of months a year. In addition, the final targeting calculation must include the costs of taxes, repairs, possible replacement of household appliances and various emergency situations.
Buying an apartment abroad and then renting it out can bring the owner an income of 4–5% per annum in foreign currency. Where is the best place to buy investment property and what risks are associated with such investments?
Photo: Anja Niedringhaus / AP
Buying real estate abroad for renting remains one of the most profitable strategies for obtaining foreign exchange returns - especially in an environment when deposit rates for dollars and euros in large banks are tending to zero, according to international financial consultant FCP Isaac Becker. Renting a purchased apartment, according to his estimates, can bring an investor in some cases up to 4-5% per year against less than 2% per annum for foreign currency deposits in large Russian banks.
According to Georgy Kachmazov, Managing Partner of Tranio International Real Estate Broker, Russian investors perceive foreign real estate as a long-term defensive asset. “Since not everything is economically stable in Russia, our clients invest abroad in the hope that everything will be fine there. But one must be aware that the price of peace is low profitability, ”the expert explains.
Kachmazov notes that the profitability of a rental apartment is calculated as a percentage of the annual rental income to the value of the object. Thus, if an investor bought an apartment for € 100,000 and rents it out for € 5,000 per year, then he receives an annual return of 5%. However, this is a conditional example. On average, a real estate owner earns less from renting an apartment, according to Kachmazov, about 2-3% per year.
This is more than for deposits, but less than, for example, for a number of Eurobond issues, which allow an investor to receive 5-6% per annum. However, the debt securities will sooner or later be paid off, and the apartment can remain in the investor's possession for as long as necessary, continuing to generate income.
The director of the real estate department of UFG Wealth Management, Andrei Rozov, adds that buying an apartment abroad is a good investment option for wealthy clients who are ready to spend no more than $ 3 million on investments per square meter. Investors with larger amounts often buy commercial real estate. the profitability of which is 1.5 times higher than that of a residential one, the financier sums up.
Location selection
The most profitable is to buy overseas property in popular vacation spots and international business centers, experts say. The former include France, Spain, the USA and other countries with developed tourist infrastructure on the seashore or ocean. In such regions, there is a high demand for rent of both expensive villas and modest apartments; the business centers with the most liquid real estate include, first of all, New York, London, Frankfurt and Geneva, Becker points out.
Kachmazov from Tranio recommends when choosing an apartment to be guided by criteria such as the size of the city (the larger the better), the level of its economic development, the logistical accessibility of real estate, and the area (either historical or respectable). The expert cites Budapest and Barcelona as examples. “In Budapest, you can buy a good apartment for € 100,000, in Barcelona, \u200b\u200bwhere the seaside resort area is located, for at least € 300,000,” he says. But the expert advises to refrain from buying real estate in the province due to its low liquidity.
What how much
One of the best investment ideas on the overseas property market is the purchase of micro-apartments, adds Kachmazov. These are small studio apartments up to 30 sq. m with a bed, bathroom, shower, table and kitchenette. Their cost is about € 100-120 thousand.According to Tranio, the profitability from renting out such housing is higher than from apartments with a large area - on average 4-5%, although the cost of rent is quite low (€ 400-600 in month). In addition, a long-term contract is usually not concluded with the tenant, and the owner of the apartment at any time can change the tenant or index his rent. The main advantage of micro-apartments is their location: they are usually located in areas popular with young people. “The number of people willing to sacrifice footage for the sake of the right place and good company will only grow,” Kachmazov predicts.
According to Tranio, Berlin offers the widest range of proposals in the micro-real estate segment: small studios cost relatively little (from € 100,000), while rent per square meter is quite high - € 25. Compared to micro-apartments, two- and three-room apartments give significantly lower profitability, since the rental price there is much lower - € 9 per 1 sq. m. In Budapest, one of the most popular tourist cities, the rental price reaches € 40 per 1 sq. m. m of rent, and the yield can be 11% per year.
How to buy
The implementation of the transaction for the purchase of an apartment takes place through the bank of the country in which this property is located. To place money in a foreign bank, the investor will need to explain how the funds were earned. The buyer may be required to provide a certificate of 2-NDFL, 3-NDFL, documentary confirmation that the money was received from the sale of some other object. In addition, most countries have both tax and migration restrictions on the purchase of real estate. In some cases, a person without local citizenship or a residence permit will not be able to purchase an apartment at all. According to Mikhail Filinov, partner and specialist in international tax planning at PwC, Russians who want to invest in real estate in Switzerland, Greece, Denmark and Canada will face such restrictions.
For example, in Switzerland, according to the Lex Koller law, as well as cantonal and municipal legislation, citizens of countries outside the European Union and EFTA (European Free Trade Association) who do not own a Swiss residence permit type C (“permanent Residence permit "), it is prohibited to buy housing for investment. However, investors have a workaround - to register the purchase of an apartment for a company in which a controlling stake and shares belong to Swiss legal entities and individuals. At the same time, a non-resident must own no more than 33% of the share capital.
Filinov from PwC also notes that in the context of the general "trend for transparency", a number of states began to require companies buying residential real estate to disclose the ultimate beneficiary of the transaction. This is how Great Britain does, for example. In general, this does not negate the convenience of this method of acquiring real estate. “For example, a large number of French real estate is registered through SCI, a special type of legal entity that is intended for the purchase and maintenance of real estate,” the expert emphasizes.
The main risks
The main disadvantage of investing in real estate is high costs: it is rather difficult to determine how much of the 4-5% earned on rent will go into the investor's pocket. Most of the costs are related to taxation. Russia has agreements to avoid double taxation with many countries. According to them, as Filinov from PwC notes, rental income from real estate is almost always taxed in the country where the purchase was made. “But since the tax abroad is usually less than in Russia, the Russian tax authorities demand that the difference be paid to the Russian budget,” Filinov comments.
At the same time, if the tax rate in a foreign jurisdiction is higher than in Russia, then you will have to pay for it, points out the partner of Paragon Advice Group Alexander Zakharov. In any case, the nuances of taxation (they are separate when buying real estate through a legal entity) must be clarified in each specific country and in each specific case, experts say.
Financial consultant Isaac Becker notes that over time, the profitability of investment real estate decreases: residential infrastructure wears out and begins to require additional investments. Investors often have to solve problems with the management company, paying for the services of intermediaries - proxies abroad - in order to reduce the overhead costs of traveling abroad. However, if an apartment is bought in a liquid area, it can be sold after a while and receive income from the growth in real estate value, however, having paid taxes on the proceeds from the sale, Becker concludes.
Featuring Danil Sedlov
Hello, dear readers of the financial magazine "site"! Today we will talk about investing (investment) in real estate.
From this publication you will learn:
- What are the advantages and disadvantages of this type of investment;
- Various options for real estate investment;
- Features of investments in construction;
- How to start investing with a small amount of free funds.
In addition, at the end of the article, you will find answers to frequently asked questions.
The article will be liked and will be useful both for those who are just looking for ways to invest their own funds and for experienced investors. Don't waste your time, start reading. And perhaps in the near future you will take the first steps towards a successful real estate investment.
What are the main advantages (+) and disadvantages (-) of investing in real estate, in which real estate it is better to invest your money, what are the ways to make a profit from this type of investment - read about this and more.
1. Pros and cons of real estate investment - the main advantages and disadvantages
Every adequate person thinks about profitable investments. It is important that investments save money from harmful influences inflation... At the same time, it is desirable that the invested funds work and bring additional income.
Investment instruments used over a long period of time will help to achieve the above goals. At the same time, it is important that they have minimal risk and be very promising. This is exactly what they are real estate investment .
The need for human housing arose many years ago and has survived to this day. She will not go anywhere in the future. Therefore real estate always will be in demand, which means that it is an excellent investment tool.
Moreover, such investments represent a perfectly acceptable option for doing business. For this it is not at all necessary to have huge sums of money. You can still invest in real estate at the initial stage of construction... In addition, there is an opportunity to become a member of a housing cooperative by purchasing a share in it.
Like any other financial instrument, real estate investments have both pros and minuses .
Among the advantages (+) of this type of investment are the following:
- real estate has high liquidity;
- constant profitability over a long period, eg by renting out the purchased property, you can make a profit for many years;
- relative availability of investments;
- a wide range of investment options.
Despite the significant advantages of real estate investments, they, like all existing investment options, are subject to risk.
The main disadvantages (-) of such investments are:
- the demand for real estate is in a rather tangible dependence on the economic situation in the country as a whole and in a particular region in particular;
- real estate prices are quite high;
- in small towns, the demand for real estate is at a rather low level;
- high additional costs - utilities, repairs, taxes.
Moreover, there is also the possibility force majeure ... It happens that the price of a property falls sharply due to compelling circumstances. for instance , apartments in an ecologically clean area will fall in price if a factory or a busy road is built nearby. As a result, the investor will not only earn nothing, but it is also possible to lose part of the money invested.
To avoid most problems, it is important to conduct preliminary analysis ... It compares possible investment options and examines various factors and circumstances that may affect the value of real estate.
Popular options where it is profitable to invest
2. What real estate is it profitable to invest in - 8 popular options + comparative table
Investment experts believe that investing in real estate is much less risky than trading on the stock exchange, investing in startups and businesses. This is explained simply: real estate very rarely gets cheaper.
It is most profitable to invest in real estate in large cities. This is especially true for residential premises. In this case, there is a direct relationship: the larger the city, the more profitable it is to invest in real estate. This fact is connected, first of all, with the difference in liquidity for it in different cities.
But it is important to understand that in each locality you can find your own suitable real estate for investment. To get the maximum profit, you should spend careful analysis all existing directions and choose the most profitable of them.
Option 1. Residential property
This option is the most affordable private investors... The risk of investments in residential real estate is minimal.
There are two ways to make money on the purchase of residential real estate:
- purchase for the subsequent resale at a higher cost;
- acquisition for renting .
In any case, when buying an apartment, it is important to pay attention to the following criteria:
- location - in a prestigious residential or student area, ecologically clean, remote from the city center;
- layout of premises, including the presence of a balcony, combined or separate bathroom;
- state - availability and quality of repair;
- infrastructure - how far are kindergartens, schools, clinics, public transport stops, shops.
In general, any criterion, even a seemingly insignificant criterion, can matter for buyers:
- view from the window;
- floor;
- neighbors;
- contingent of the location area.
To buy an apartment (or other residential property) as profitable as possible, you will have to look for it by yourself , without the help of a realtor. However, it is important to check the purity of the transaction being made. We talked about how to do this both in the primary and secondary housing market in the last issue.
Option 2. Commercial property
This option for more experienced investors... For such investments, both small office and retail space are suitable, as well as large-area buildings designed to accommodate warehouses, supermarkets, production workshops.
Such premises are invariably in high demand. A huge number of businessmen are looking for areas for doing business and are ready to give them to the owner rent... Those who buy commercial real estate have to regularly receive profit from their investments.
Rent is a classic production option. In this case, the investor's profit does not depend on the time spent on work.
It is useful for an investor to know that when choosing commercial real estate as an investment object, it is required to have a sufficiently large amount of money. Contributions in this direction usually start with five -seven million rubles.
Option 3. Land plots
The purchase of a land plot requires a smaller amount of money than the purchase of an apartment or commercial real estate.
There are a number of advantages of investing in land:
- the minimum level of the likelihood of fraud;
- no repairs required;
- lack of payment for utilities;
- the purchase procedure is easier than for other real estate;
- relatively low taxes;
- simple design;
- there is no need to resort to the help of realtors.
All land plots can be classified by purpose of use... For short-term investments with minimal costs, the areas that are used are most suitable for construction ... More long-term investments worth doing in land intended for use in agriculture and industry .
But there is also limitations investing in land. First of all, the state has tightened control over the use of land for its intended purpose. Besidestaxes on this type of property have recently been increased.
Option 4. Suburban real estate
Buying suburban real estate for the purpose of its further resale stably profitable occupation ... This is especially true for large metropolitan areas due to the fact that more and more often their residents are trying to settle or have the opportunity to relax as far as possible from city noise and dirty air.
There are several options for investing in suburban real estate:
- acquisition of objects under construction;
- investment in finished cottages;
- purchase of land plots intended for the construction of suburban real estate.
The prospect of investing in suburban real estate increases over time. But when choosing an object for purchase, you should pay attention to its location, existing infrastructure and communications... Other factors that are important for creating comfortable living conditions may also be of great importance.
Option 5. Real estate under construction
Another investment option is investing in real estate under construction (new buildings). Despite the fact that the riskiness of this option is somewhat higher, but you can also get much great profit.
The explanation is very simple. - a property under construction costs much less than on the secondary market. Therefore, if you invest at the initial stage, after the end of construction, prices are likely to be significant grow up ... As a result, the investor will receive tangible profit.
Risks when investing in real estate under construction are most often associated with the developer company. If he is unreliable, he goes up risk the following situations occur:
- untimely commissioning of the property;
- complete freezing of the construction site;
- with illegal construction or lack of permits, complete demolition of the building is possible.
That is why, before investing in real estate under construction, an investor needs to conduct a thorough analysis of the developer.
At the same time, it is important to study not only the company's reputation, but also the following characteristics:
- time of existence of the company;
- the number of completed and commissioned objects;
- whether there were any downtime during the construction process in the past, their duration and reasons.
Sequential stages of investment in construction
5.3. How to invest in construction correctly - 5 main stages
Any investor knows that investments according to a pre-prepared plan can increase the level of profit and minimize the riskiness of investments. Investments must be carried out consistently, in accordance with the developed strategy. There are five stages of this process.
Stage 1. Choosing a developer
A mandatory and important measure at the initial stage of investment in construction is developer analysis... It is important not only to find out the name of the developer, but also to clarify what his reputation is. Experts recommend investing only in those projects under construction that are being built by a well-known construction company in the city.
In the process of choosing a developer, it is important to consider:
- the reputation of the company;
- how many objects the company has already put into operation;
- reviews;
- how experienced the company is in complex construction;
- how many investors the developer has;
- partnership with credit institutions (banks carefully choose whom to cooperate with, conduct a thorough analysis and do not interact with developers who have a dubious reputation);
- how carefully the developer complies with the legislation (the main regulatory act is federal law 214 -FZ).
In Moscow and the Moscow Region, you can trust the following developers:
GK PIK Is one of the largest developers in Russia. The company was founded in 1994 and successfully implements large construction projects throughout Russia. Focuses on construction accessible housing. Over the years of activity, about 250 thousand apartments with an area of \u200b\u200b15 million square meters have been built. m. It is one of the backbone enterprises in the Russian economy.
А101 Development - the company has built about 500 thousand sq. m. residential real estate, as well as more than 50 thousand - commercial... The developer is also building kindergartens and schoolsinteracting with the budget. Cooperation has been established with several large banks within the framework of mortgage lending programs. The developer is included in the TOP-5 in the Moscow region and in the TOP-15 throughout Russia.
Capital Group - a company that deals with the full cycle of construction activities from analysis of plots for construction to finishing the finished real estate. Completed 71 projects, resulting in the construction of 7 million square meters. m. area. The company's facilities were named the best projects in Moscow and the Moscow region.
Stage 2. Choosing an investment object
Another important stage of investing in real estate under construction is selection of a suitable object... The best place to start is in the area where the demand for living space is highest.
When choosing an object for investment, it is important to consider the following parameters:
- infrastructure;
- proximity of public transport stops and metro stations;
- other characteristics that affect the degree of living comfort.
If you plan to invest in commercial real estate, you should think about the final goal of the investor in advance. It will also be useful to draw up a professional business plan.
Stage 3. Conducting negotiations
When the developer and investment object are selected. You can start negotiating... It is important to understand that in accordance with the laws of our country, it is impossible to register the rights to real estate under construction.
However, the investor has the right:
- draw up an agreement on equity participation;
- join a building cooperative;
- register an investment deposit;
- conclude a share contribution agreement.
Experts advise to stay on the equity participation agreement.
In addition to the method of registration of the agreement, the conditions for depositing funds are discussed. The main ones are the acquisition of installments (payment in installments) and a one-time deposit of funds, but other options are also possible.
Stage 4. Examining the documentation
All agreements entered into must comply with applicable law. It will not be superfluous to check them with the help of an independent lawyer. Many people think that this is a waste of money. But it is not advisable to save on the security of transactions.
Stage 5. Conclusion of the contract
The final stage of the transaction is conclusion of a contract... Before signing the final agreement. It is important to carefully study all of its points.
In this case, you should pay attention to:
- when it is planned to finish construction;
- what are the conditions for termination;
- the price should be fixed, there should be no conditions on the basis of which it will change;
- fines in case of violation of the terms of the contract must be prescribed for each party;
- force majeure circumstances.
It is important to approach the transaction for the acquisition of real estate under construction with the utmost care and responsibility. It is important to remember that there are risks that can be mitigated by strictly following the sequence of investment stages.
5.4. How to make money on investments in construction - TOP-3 working ways
The investor should know what methods of earning money on the purchase of real estate under construction are the safest and most proven.
Method 1. Renting out
Earnings from the transfer of real estate for rent is long term investment... But this option has a stable level of profitability.
The payback period in this case exceeds five six years old. But do not forget that the areas in any case remain the property of the investor.
In large cities, there is a demand for rent of various types residential property : luxury apartments for a day, rooms located in sleeping areas, studios for young families and others.
Taking into account commercial property , it can be noted that the demand for it from entrepreneurs is also consistently high. Premises located in business and shopping centers are especially popular in large cities. The only drawback of commercial space is the need for investment quite large sums of money.
For purchase apartments usually enough 1,5 -2,5 million rubles. If you plan to invest in commercial property, it will take about 2 -3 times large sum.
Method 2. Acquisition of an apartment under construction for sale after commissioning
If you buy a property under construction for resale, you can recoup your investment quickly enough - already after 1 -2 of the year... The sooner the construction of the facility is completed, the more interesting it is for investors. Particularly lucky investors receive income in one year in the amount of 100 % of the invested funds.
It is important to evaluate other options as well. You can make quality repairs in the finished apartment. As a result of such actions, its cost will increase by about a quarter.
Method 3. Participation in collective investments
Investors who are looking for the safest options for investing in real estate under construction can be advised cooperate with intermediaries ... In this case, you can become a participant professional investment projectwithout buying real estate at all. To do this, it is enough to join a collective investment fund and receive income as a shareholder.
There are several reliable funds operating in Moscow and the region that invest in real estate. Including under construction:
E3 Investment - here the minimum amount to enter is 100 thousand rubles. When the profit is guaranteed at the level 25-90 percent. All investments in the fund are insured. The investor can independently choose the payback period of the investment from six months before two years old... Investors' money is invested by professionals in highly liquid real estate, the investor only needs to make a profit. This option is passive earnings with guaranteed profit and a minimum level of risk... The company provides information support, as well as free consultations for investors.
Sminex - the company invests in finished apartments, as well as objects at the construction stage. The company builds houses itself, as an additional service, investors receive repair of apartments... In addition, the company takes care of finding tenants. The company builds cottages, residential buildings, commercial facilities. Experts call the indisputable advantage of the presented organization the focus on achieving high quality of real estate under construction, as well as their safety during operation.
Thus, there are several ways to make money on real estate under construction. They differ not only in the level of profitability, but also in the efforts that will be required from the investor.
5.5. 4 main risks when investing in real estate under construction
Any investment carries the risk of losing your investment. To minimize the probability of losses, one should early to study what schemes are used by fraudsters in the real estate industry, what to fear when investing in construction.
Risk 1. "Soap bubble"
The first way to cheat gullible investors is extremely simple. Fly-by-night companies sell to gullible investors myth , and not actually under construction objects. All work on construction sites is carried out exclusively for a diversion.
Often, such projects are organized and managed with the help of various legal structures. As a result, the deals from the outside look like absolutely legal... However, as soon as the scammers collect a sufficient amount of money, they disappear along with the contributions of investors.
The first way to identify a soap bubble - greatly underestimated value of real estate objects. The investor should compare prices with the average in the area under consideration. Too low cost should alert.
It is also important to make sure that the information about the developer is in the official register. All active construction companies are included in it. Therefore, if the firm in question is not on this list, it is not a real legal entity.
Risk 2. Bankruptcy of the developer
There are many reasons why a construction company can go bankrupt:
- ineffective management;
- misuse of funds;
- lack of finance;
- high costs.
Naturally, the lack of money affects not only the construction company itself, but also investors. In order not to face such a problem, when choosing a developer, you should focus on large company, which has already commissioned a large number of constructed facilities.
Risk 3. Non-compliance with the deadlines for the delivery of real estate
Another nuisance for investing in real estate under construction is missed construction deadlines ... This risk is especially unpleasant for those who buy real estate with the help of credit funds. The lender does not care when the property will be commissioned; it is important for him that all debts are repaid on time and with appropriate interest.
Experts came to the conclusion that every day of failure to meet the deadline eats 0,01 % of investors' income. In percentage terms, this is not much. However, in terms of rubles it turns out decent amount, especially when commissioning is delayed for several months or even years.
Risk 4. Force majeure situations, as well as unpredictable changes in the real estate market
These circumstances can also lead to the loss of a part of the investor's funds. An example of force majeure is the onset of a prolonged economic crisis... As a result, the supply in the real estate market can significantly exceed the demand. This circumstance leads to significant reduction in property values - often by 10 -20%... Even when the situation evens out, investors will already lose some of their potential income.
Also, an example of force majeure can be natural disasters (forest fires, floods, earthquakes), wars, industrial disasters. The only way to protect yourself from such risks is insurance of real estate under construction.
Thus, like any type of investment, investments in real estate under construction are accompanied by various risks. Some of them can be minimized by conducting a thorough analysis in the process of selecting an object for purchase. In other cases, insurance helps to avoid unpleasant consequences.
6. Practical recommendations for increasing the return on investment in real estate
By investing in real estate under construction or finished, any investor seeks maximize final profit. This can be done using the methods below.
Recommendation 1. Make redevelopment and agree (legalize) it
Redevelopment of a residential property - the simplest option, which allows you to make housing more functional without changing its total area. If you carry out the redevelopment measures correctly, you can increase the cost of an apartment or house by 15 -30%.
At the same time, you should not carry out an uncoordinated redevelopment.. All planned changes must be registered with the authorities dealing with these issues. Today it is the architectural department in BTI, as well as the district administration.
It is important to know that the legislation prohibits some types of changes to the layout, eg , demolish load-bearing walls, as well as expand the kitchen at the expense of living space, increasing its size by more than a quarter.
Recommendation 2. Attach additional space
This option to increase the cost is available for private houses and cottages... There you can build additional floors, convert attics into attics, build a balcony or veranda, and make other architectural changes.
Recommendation 3. Make quality repairs
If you make a quality repair, the price of an apartment will rise by about by 15 -25%... The profit will be higher if you do the repair yourself, investing only in the purchase of materials.
It is important to buy quality materials... Buyers may well distinguish between good quality consumables and cheap Chinese ones.
Recommendation 4. Convert residential property to commercial property or vice versa
Having studied the demand for real estate in a certain area, you can transfer non-residential property to residential property and vice versa. Making a profit from the conversion of residential space into commercial space is important for large cities, especially for business districts and walkable streets.
Thus, it is important not only to invest in real estate, but also subsequently to try to extract the maximum profit from it. We described above how to do this.
Ways of investing money in real estate with small capital
7. How to invest in real estate with small capital - 3 real methods
Many people think that not enough money is an obstacle to investing in real estate, but this is not the case. Smart business people are able to get by with minimal funds, as well as attract additional funds. There are several methods to do this.
Method 1. Raising borrowed funds
The most popular way to increase your investment capital is loan processing for the purchase of real estate. Today many banks provide such loans.
By the way, we talked about that in one of the previous articles of our magazine.
The investor should take into account the fact that any borrowing is associated with the payment percent... Therefore, it is important to take into account additional costs during the analysis. The planned income should cover the interest on the loan and provide profit.
For a loan, you should apply to large credit institutions with positive reputation.
It is not necessary to take out a loan at interest. Many wealthy relatives give loans to loved ones at no extra charge.
Method 2. Attracting co-investors
Ideal for investors with insufficient capital - unite ... For those who have carefully thought out the project and will convince others of its effectiveness, finding partners will not be a problem.
Method 3. Choosing the right strategy
Any investor understands that competent investment planning is an important component of their success. Those with insufficient investment knowledge may be advised to seek help from more experienced investors.
Various investment clubs are an example of quality support for newcomers. Such projects bring together investors who pass on their experience to beginners. Clubs conduct various activities - courses and seminars detailing private investment. Considerable attention is also paid to investments in real estate.
On the subject of real estate investment, the following issues are being studied:
- strategies;
- how to enter the world of investment with a minimum capital;
- investments in various types of real estate;
- lease and sublease.
Thus, insufficient capital is not a barrier to investment. Any purposeful person will find ways to implement profitable investment.
8. Help from professionals when investing in real estate
Help from professionals there is no free... However, it helps much increase the level of return on investment.
For those investors who wish to minimize risks, but at the same time provide a sufficiently high profitYou can be advised to cooperate with experts in the field of real estate investment.
There are three companies working in this direction in Russia:
E3 Investment offers to invest funds for a long time in different types of real estate. This ensures a high level of income. Here is the minimum threshold for entering the real estate market. Investors can deposit an amount of 100 thousand rubles or more.
Those wishing to invest in this company can immediately find out the level of expected profit. To do this, just use the calculator on her website.
Investment company contributions are characterized by a high degree of reliability. All types of assets have three types of insurance.
Activo offers access to the most liquid areas. Investment security is ensured through independent collective ownership. When investing funds from two million rubles, the company guarantees a profit in the amount of 11,6 %.
The investor purchases real estate and transfers it to the management of professionals. The company provides its clients with full reporting every month, and also guarantees the safety of the invested funds.
Gordon rock Is a real estate agency with an international presence. Investors, using the services of the company, can invest in hotels, commercial and residential real estate located abroad.
The following services are also provided:
- buying rooms in hotels, catering facilities, medical centers, mini-hotels;
- acquisition of real estate for persons of retirement age;
- capital investment in a ready-made business in several countries of the world;
- consultations and seminars dedicated to effective investment.
Thus, to invest in real estate, you do not need to have a lot of capital and significant knowledge. It is enough to turn to professionals for help.
9. Frequently Asked Questions (FAQ)
The subject of real estate investing is multifaceted and difficult to understand. Therefore, many investors have various questions on this topic. Especially it concerns newbies ... Let's try to answer the most popular questions.
Question 1. Where is it more profitable to invest money: in real estate or in a bank for a deposit?
Often, people with no experience in investing, who have an impressive amount of money, wonder what to do with it - buy an apartment and rent it out or put it in a bank for a deposit?
Suppose the investor has available 3 000 000 rubles. Let's consider both investment options.
- If you put money in the bank at 10% per annum, you can earn in 12 months 300 thousand rubles, if the terms of the deposit do not provide for capitalization. Read about how and how to calculate the deposit with replenishment and capitalization in a separate article in our magazine.
- Now suppose an investor has bought a one-room apartment in Moscow for the funds he has. By renting it out, he will receive 25 thousand rubles a month. As a result, in a year the same amount will run into 300 thousand rubles.
When comparing the two options, do not lose sight of the fact that in the case of renting, additional costs arise - for utility bills, taxes, repairs other. In addition, you will have to spend a significant amount of time searching for a suitable property, settling tenants.
It would seem that deposits are much more profitable than buying an apartment with subsequent renting out. But this is not entirely true; analyzing the example, we did not take into account the presence of inflation. The depreciation of funds gradually eats up savings.
At the same time, it is worth considering an important investment rule - you cannot trust the official data on the inflation rate. In fact, money depreciates much faster.. It turns out that in the best case, the interest on the deposit will cover inflation, but it is unlikely that it will be possible to make money on such investments.
At the same time, property prices rarely fall. In the long term, its value increases. Also, rent is constantly becoming more expensive.
Thus, it turns out that when considering the short-term period on deposits, you can earn more. However, given that apartments are becoming more expensive, it can be noted that real estate helps to more effectively resist inflation.
Question 2. What kind of real estate is more profitable to rent: residential or commercial?
Some investors purposefully analyze the real estate market in order to understand which properties are more profitable to rent - residential or commercial... In general, it is impossible to answer this question unambiguously, since there are commercial and financial risks in the market.
For large investors it is usually preferable commercial real estate ... Experts believe that such investments pay off much faster. However, due to their peculiarities, they are more difficult for beginners.
Concerning residential property , it is beneficial to lease it to those who received it without monetary costs, for example, by inheritance or as a gift. When buying such a property, it will pay off for a very long time.
It is worth understanding that investing in commercial real estate is quite risky. This is due to the fact that they are more influenced by the situation in the country's economy, for example, the onset of the crisis period.
Investments in commercial real estate are subject to other types of risk that are difficult to account for. As a result, mistakes can be made in the process of calculating the required capital, which ultimately will lead to an increase in the likelihood of buying an object with low liquidity. Such investments can not only not make a profit but also entail significant losses .
However, speaking of financial relations, it can be noted that in the case of commercial real estate, they much more stablethan the owners of residential premises with their tenants. When making a lease on commercial real estate, the tenant is interested in keeping it in proper condition. This is due to the fact that exactly the condition of the areas where the activity is carried out forms the opinion of the clients about the company... Tenants rarely try to keep them in the best possible condition.
The issue of income received from renting out different types of real estate stands apart. Everyone knows that when comparing premises of similar area, commercial properties bring in much more income than residential ones.
Note! When buying a property, an investor must analyze, what is the potential income it will bring ... This is especially true for those objects that have already been rented out. It is quite possible to make a forecast of the profitability of a property at the time of its acquisition.
Should also compare efforts required to manage multiple properties. Naturally, objects residential property (even if there are several of them and they are located in different parts of the city) are much easier to manage than, for example trade areadivided into parts and leased to several businessmen. It is all the more important that commercial real estate is rented for a much longer period than residential real estate.
Some investors will argue that today real estate management can be transferred to specialized organizations. But this again requires additional financial investments.
What conclusion can be drawn from this?
Thus, it is more profitable to rent out commercial real estate. However, this requires a significant investment of money and effort from the investor, as well as high-quality knowledge of the market conditions itself.
Investments in residential real estate are available to a wider segment of investors. Much less cash capital is required for this. At the same time, such real estate can become a source of practically passive stable income for a very long period of time.
Still, investors who have at least minimal experience of investing in real estate can be given important advice. Before making a choice in favor of any real estate object, it is worth conducting a thorough analysis of all possible options, paying attention to both residential and commercial real estate.
Question 3. How to buy property as cheaply as possible?
The fact that real estate is a profitable option for investing funds is unlikely to be doubted by anyone. However, there are ways to dramatically increase your bottom line. To do this, you can use tips on how to buy property as cheaply as possible. With a good combination of circumstances, you can save about 30 % of the cost.
Let's consider the possible options:
1) We discussed in detail purchase of real estate under construction ... Such investments are profitable and have a good return on investment. However, the level of risk in this case is much higher.
Unfortunately, it is possible that the construction of the house by the developer will not be completed on the appointed day. Moreover, there are cases when houses have not been commissioned for many years. In such situations, it is often unclear whether construction work will be completed at all.
In most large cities there are several associations of defrauded real estate investors. These people, for various reasons - for personal needs or for the purpose of investment - bought apartments in buildings under construction, but in the end remained at a broken trough ... Suing a construction company can be tricky, especially if it declares itself bankrupt.
2) Another option to reduce the amount of investment is purchase of real estate without renovation ... The investor invests in finishing work, after which the price of the property immediately rises. With a successful combination of circumstances, high-quality repairs using sound materials, you can quickly get about 15 % arrived.
3) Investors with experience in the real estate market use even more interesting ways to save money on the acquisition of an investment object. For example, many of them acquire real estate confiscated for various reasons, put up for auction .
In case of recognition of companies, their creditors are interested in returning the money due to them as soon as possible. Therefore, the property of bankrupts is often put up for auction for a very heavily discounted prices... About trading and, we wrote a separate article.
4) In connection with the emergence of a large number of non-payments on mortgage and other types of collateral loans, credit organizations often sue their clients for property that acted as a guarantee of a refund under the contract. Such real estate is also sold by discounted prices, since banks are interested in the speed of their own funds return.
Where to look for such offers:
On the Internet, you can find specialized sites that collect information on the sale of real estate, confiscated from debtors, as well as sued as collateral. Often, investors find here very interesting options for investing.
In addition, information on the sale of pledged as well as confiscated real estate objects of legal entities is contained in the relevant register for their bankruptcy.
Question 4. What books on real estate investment should a newbie read?
Any questions related to the field of finance require certain knowledge from the persons dealing with them. Therefore, it is important to study specialized literature on topics of interest. Investments in real estate are no exception.
Book 1.
Many professional investors believe that Robert Kiyosaki is the best book on real estate investment. It is called quite trivially - "Investments and Real Estate".
Also in this work there is a huge number of tips that do not lose their relevance, and other stories that professionals share with the reader.
Book 2.
This is the perfect book for newbies in the field of real estate investment. It tells in an accessible form, profitable and correct.
The work contains detailed, well-structured instructions on what actions a beginner needs to take.
Anyone, even without financial education, can extract a lot of useful information from the book by easily reading it.
Book 3.
This book is ideal for those who are a little familiar with investing. It will help you learn more about how to work with investment objects.
The reader will learn how to choose the most profitable property, how best to work with a huge amount of necessary information and documents.
Great importance in the product is given to how to maximize the profit.
Book 4.
Instead, the work contains useful information on how to invest in real estate without risking losing personal money.
In addition, here is how to get good profit from such investments.
Book 5.
The book tells you what are the ways besides resale to make money on real estate investments.
After reading, the investor begins to realize that there are a lot of ways to make money by carrying out such activities.
10. Conclusion + related video
Thus, investing in real estate is a promising way of passive income. It doesn't matter how much money the investor has. In the modern world of investments, you can even start earning with a small investment.
Nevertheless, it is important to constantly engage in self-education, try to find out as much useful information as possible.
That's all for today. Successful and profitable real estate investment!
If you have any questions or comments on the topic of the publication, then leave them in the comments below.!
Many wealthy people invest in real estate in order to save money in an unstable economic situation. Some of them make fortunes from such investments.
There are several options for investing your own funds: bank account, securities, currency, gold and real estate. They all have their own advantages and disadvantages. The main disadvantage of investing in real estate is the inability to predict with absolute accuracy what will happen in the future with the real estate market in the country where you are going to invest your funds.
Nevertheless, many people study foreign real estate markets, constantly monitor price information, monitor the political and economic situation - and, in the end, manage to catch the very right moment when such an investment will make a profit. There are three advantages to investing in real estate:
- firstly, it is the most reliable option;
- secondly, real estate is forever;
- thirdly, real estate always rises in price.
When purchasing real estate at home or abroad, you can either rent it out or resell it after some time. According to experts, it is most profitable to do this kind of business in the following countries:
1. Norway. The main advantage of this country is a stable economic situation, so that investors can be sure about the safety of their funds. In addition, when buying real estate, all associated costs are not more than 5 percent of the purchase price. If you rent out housing in Norway, then your investment can be recouped in just a few years.
2. South of France. This option is for very wealthy investors, since housing in this area is very prestigious and expensive. Nevertheless, there is always a great demand for housing - and the rental of real estate brings a significant income.
3. United Arab Emirates. This country is unique in many economic respects. In 2008-2010, there was a slight decline in real estate prices, but in general, the pace of development of the country suggests that in the coming years any investment will pay off here one hundred percent.
4. Panama. The reason why this country was included in the list of the most profitable countries for investing in real estate is the growth of the economy and the interest of American tourists, especially pensioners, who often move here even for permanent residence. Panama is called the "Latin American Dubai": three hundred skyscrapers are being built here, and the market still has good potential.
5. Turkey. Investing in real estate here is associated with a well-developed tourism sector of the economy: not only Russians and citizens of the CIS have chosen Turkish resorts in the last decade, but many Europeans also prefer Turkey to their own resorts. prices\u003e Housing prices are growing steadily here, but still remain below European levels.
6. Morocco. In this country, the situation is similar to that of Turkey, with the only difference that the development of tourism here has just begun to gain momentum. According to the forecasts of local authorities, in the near future in Morocco the number of tourists should grow to 10 million people a year.
7. Brazil is another country with a rapidly advancing economy, a healthy political course and huge potential. Investors are especially interested in the northeast coast.
8. Egypt. The flow of tourists here is still growing, the demand for housing is consistently high, prices are extremely low. The main thing is to choose the right place and object, since not all real estate is rented out in Egypt equally easily.
9. Thailand. Thailand is also attractive to investors due to its well-developed tourism sector - however, you need to carefully choose the city for purchasing real estate: in Thailand there are areas where it is extremely difficult to rent or resell housing.
10. Malaysia. The economic situation here leaves much to be desired, but property prices are extremely low.
Of course, this is only a rough list there are several countries to look out for if you are considering investing in real estate. Before deciding on such a step, you should carefully study all the accompanying factors and systematically monitor the situation on the real estate market.
A modern person, having a certain amount of money, sooner or later wonders about the way to invest and receive benefits from it. In the 21st century, a popular type of investment is investing in various types of property. With the help of the site, we will consider whether it is worth investing in real estate.
What are real estate and investments?
Before starting such a serious study, you must first clearly understand what is at stake.
The property - this is property, land and everything associated with it or a water body firmly connected to the land, which cannot be moved or it will cause great damage. It is confirmed by law in the form of documents required for a certain type of property. Real estate is the most profitable investment asset.
Investments - the type of investment of funds in the creation or development of own or third-party production in order to obtain benefits, benefits or profits in the end result.
Investing in real estate is investing in real estate already built or under construction for profit.
We have analyzed the basic concepts, and the question clearly arises before you, is it worth investing your savings in real estate? After all, the state in our country is very unstable, there are constant changes in the market, the price level is subject to both a sharp jump and an equally sharp drop. All questions and doubts you have are quite natural.
We will consider all possible types of such investments. We will definitely show you all the possible risks that you are likely to face with a certain funding of funds, all the pros and cons of such an investment, and summarize.
Types of real estate investments
The object of investment of your money can be both housing or land, and office premises or shopping centers. We will consider with you the 5 main types of investments and all the possible nuances that you may encounter.
After reviewing all the options, you may well be able to answer your question "how to properly invest the available financial opportunities in real estate?"
Purchase of residential premises
The purchase of residential premises is now enjoying great interest from investors. Having bought, say, an apartment in a new house, it becomes possible to rent it out and profit from it. Or, having bought a house with a mortgage, pay it off during the entire period of the loan from the rented money received.
Despite the fact that this method of making a profit or benefit is quite affordable in our time and has fewer risks, there are a number of nuances when choosing a living space:
- It is necessary to select an area and study the market to determine the rental price;
- It is important to choose places where there are shops, pharmacies, markets and shopping centers or hypermarkets in the nearest availability;
- Soberly assess the current state of the housing, and, if necessary, make redevelopment, major repairs or cosmetic;
- The view from the window is equally important;
- Coziness and the right furniture will have a significant impact on the demand for your home.
Having thought through everything competently, you can get a good profit from renting or the ability to pay off the mortgage loan at the expense of the leased funds received.
Important! You must understand that renting out a home implies not only making a profit, but also periodically investing finances in the form of cosmetic repairs or changing pieces of furniture. Therefore, you should not spend a lot of money on repairs and furniture, the main thing is just to choose everything successfully and combine it with taste.
Real estate under construction - is it worth the investment?
Buying an apartment in a building under construction can bring more income than buying a finished new home. The difference lies in the fact that apartments in a building at the construction stage cost significantly less than ready-made ones. In this regard, after buying such a home, after a while, you can sell it at a much higher price and get tangible profits.
Despite such an important plus as receiving significant income, there are some risks:
- Failure of the construction time is possible;
- Stop of construction;
- The developer's bankruptcy is also possible;
- Demolition of the construction that has begun due to the lack of the necessary set of documentation or the legality of the entire construction.
All potential risks usually occur through the fault of the developer. Before investing in a very inexpensive apartment in a house under construction, you need to spend time and find out in detail the reputation of the developer. It is also necessary to find out the duration of the existence of the developer's company on the market, how many built and handed over houses he has on his account and whether there were any questions and problems during the construction or delivery of apartments.
Taking into account the above risks, we can conclude that such an investment is profitable.
Attention! To benefit from the purchase of an apartment in a building under construction, you should not be led at too low a price and a young developer. It is better to choose a company with a well-deserved authority and an existing history in buildings.
Buying a land plot
You ask, is it profitable to invest finance in real estate such as a land plot? But the more profitable the deal is, the more nuances and risks it has.
Land plots have their own special specifics. The plot will not always be sold and easily rented out. When buying land, it is important to consider conditions affecting liquidity, such as:
- Remoteness from the city;
- Location;
- The popularity of this area;
- Availability of communications and the ability to install them.
Also, when choosing a land plot, it is worth considering environmental nuances, political and economic factors. Taking into account all the features and conditions, buying a certain piece of land, you can get a significant profit.
Is it profitable to invest in suburban real estate?
The last few years have become very popular country vacation, in this regard, there is a demand for renting cottages outside the city for rent. Due to the good demand for this rental option, it is safe to say that the investment will bring good returns.
Also, when buying a land plot or an unfinished house, if it is possible to carry out the necessary work, you can resell the plot with the house for a different price. Due to the good demand for out-of-town vacations, buying houses is also quite popular nowadays.
But naturally there are some difficulties. For a successful rental, the surrounding nature is important. A beautiful pond and a nearby forest or grove will dramatically increase the demand for your offer. And the absence of natural beauty or an inconvenient location will minimize the number of people who want to relax in your country house.
To sell a house, it is important to consider not only the presence of a reservoir, but also the availability of shops, communications, the proximity of schools and kindergartens. All of this will affect liquidity.
Profitable investment in commercial real estate
Buying offices or shopping centers is the most profitable type of investment. But such an opportunity is far from easily accessible.
Starting this kind of business, you will have to conduct constant strict control and personal presence is necessary constantly in order to avoid various types of violations. Installing meters, legally operating a building, maintaining bookkeeping, paying taxes and much more requires additional professional help. Finding such people is also not easy, it is a certain risk and a requirement for your constant personal presence and control.
We have reviewed all the main types of real estate investments and the nuances related to them. It remains to choose a method of investing your money that is more suitable for you.
We invite you to consider the positive aspects of such a business and possible pitfalls. Benefits:
- Stability;
- Safety of the investor's savings;
- A sufficient level of risk is offset by a high level of profitability;
- Inflation protection;
- Financial freedom of the investor;
- The trend towards the development and growth of the real estate business;
- The ability to receive passive income from an undervalued property simply by reselling it, but for a longer time;
- When you buy an asset on credit, the price of the object rises, and the value of the ruble falls, as a result, inflation “eats up” your overpaid%.
As you can see, there are many advantages. We examined the main ones. But in any business, there are also possible problems that investors may face. Let's consider the main nuances:
- Low liquidity, delays in resale or leasing are possible for various reasons;
- The risk of incorrect maintenance and operation of the facility, which may affect the technical condition;
- Risks associated with investing in facilities under construction that depend on developers;
- There is dependence on the economic situation in the country;
- Possibility of additional costs;
- Inability to predict the exact cost in the future.
We examined in detail all the possibilities of earning money on the acquisition of real estate. Now it has become clear and obvious that this type of investment is one of the most profitable and promising. If you have a certain "baggage" of your own funds, you can make very good money. If money is on the shelf, inflation “eats” it, and if it is in motion, you can make profit and manage it further.
Perhaps you ask about investment opportunities in Moscow and how will it work? Large cities such as Moscow or St. Petersburg are an excellent start in the field of investment. The cities are large, dynamic and actively developing, which opens up new opportunities and prospects for earning money.
In conclusion, let's comment on the question: how to invest in real estate with small capital? This is very easy to do. When owning funds for a down payment, you can purchase assets on credit. Inflation will happily "eat up" your overpayment, and the constant rise in real estate prices will give you that very coveted profit.
We suggest watching a video, which briefly explains why it is profitable to use an investment in assets such as real estate.
How to buy real estate that will generate income?In contact with