Investing in real estate: pros and cons. Should I invest money in real estate? Buy or build a multi-apartment low-rise building and rent it out

According to research, investing in real estate has been considered among our compatriots for many years to be the most reliable way to earn money and preserve their capital. Experts do not deny that this is true, but at the same time they emphasize that the degree of reliability depends on the investment object. In general, there are seven main ways to invest money in real estate. We invite you to familiarize yourself with the features of each of them so that you can evaluate your “wants” and “cans”.

The first way is to buy land

This option has a number of advantages. Firstly, a land plot costs much less than pre-built buildings. Secondly, unlike houses, land does not have such a negative feature as obsolescence, which means there is no need to spend money on repair work and maintaining the investment object in good condition. Thirdly, recently the area of ​​construction of cottages in suburban areas has been flourishing, so the land can easily be sold for the construction of mansions, townhouses and other types of real estate.

Anton Murygin will tell you how to buy good land at a price below the market

The second way is to buy an apartment

Buying a finished apartment for the purpose of renting it out is considered one of the most common ways of investing in real estate among ordinary citizens, and not investor-entrepreneurs. True, the profitability from this method is not high, only about 5% per year, although it is considered very reliable.

The third way is to buy a room

If the investment amount is small, you can invest it in the purchase of not a whole apartment, but just one room. Of course, this method of investment is most profitable in large cities, where rental costs are quite high and visitors often rent separate rooms. Experts note that when renting out a room, the profitability is even higher than with a similar disposal of an apartment - about 10-20% per year.

You don’t need to buy an apartment for 2 million or more, you just need to come to the bankruptcy auction and buy it there for 200 thousand rubles. Agree, you won’t find an apartment for 200 thousand now. Oleg Selifanov talks about this method in the video:

And also, visit his master class

Visit the nearest master class by Oleg Selifanov:

How to find and buy gold objects using the Sherlock Holmes method

The fourth way is to invest money in a mutual fund

Closed real estate mutual funds provide the opportunity to invest even a small amount of money, on which the size of the dividends received will depend. In other words, the investor becomes the owner of a certain number of “units” and owns securities that certify his ownership of part of the fund - an apartment building, industrial or commercial real estate, etc. In this case, the income from owning the fund is distributed among shareholders as a percentage depending on the number of shares . Experts note the transparency of how shareholders manage their money, as well as the incredibly high profitability of this investment method. But you need to keep in mind that it will take several years to withdraw your funds from mutual funds.

Similarly, you can invest money in foreign mutual funds. There are organizations that distribute all the money for real estate in different countries, which provides additional guarantees of saving funds in the event of an economic or political crisis in one of the countries.

Investment analysts note the benefits of this method of investing money. And although its profitability is lower than investments in domestic mutual funds, the guarantee of receiving dividends is much higher.

The fifth way is to invest money in purchasing a housing certificate

Another option for registering your real estate investments. In this case, the investor buys a certain number of square meters in a house under construction. After completing the construction process, you can either exchange the certificate for a finished apartment with the living space indicated in it, or sell the certificate at an already increased price. The benefit is provided by the difference in the cost of real estate at the construction stage and after the house is put into operation.

The sixth method is taking ownership of real estate as a shareholder

The purchase of an apartment is carried out at the stage of construction of a multi-storey building. The investor invests money in an object under construction, and then receives a finished apartment that can be sold. The benefit is obvious, because the difference between the money invested in construction and the price of the finished residential property is very significant. The only catch is the risks associated with frozen construction, fraud by developers, etc. Many have heard about how shareholders were deceived, so with this method of investing it is better to consult with experts.

Nikolai Mrochkovsky will be an expert on this issue; he tells how to invest in new buildings during a crisis

The seventh way is to invest in the purchase of real estate or land abroad

The only disadvantage of this method of investing is the rather high investment threshold. Despite the fact that apartments in Europe can often be purchased much more profitably than in some Russian cities, the governments of many countries only allow large players into the real estate market. Another obstacle may be the lengthy documentation procedure and the need to pay real estate taxes. Otherwise, this is a highly profitable and stable investment method.

In the stock or other financial market, people are thinking about how they can make money on real estate and receive passive income.

Investing in real estate is a great way not only to save your money, but also, if invested wisely, to increase your capital. The easiest way to make money in the real estate market is to buy any real estate and sell it when the price rises. But this method cannot be classified as investing. This is speculation, which can result in the loss of a significant part of your capital.

There are investors who prefer to own the property and rent it out, receiving rent from it. This investment scheme is longer-term, but quite reliable.

Many novice real estate investors think that such an investment will not provide tangible profit, and it is comparable to a bank deposit. Indeed, if you simply buy, for example, a ready-made apartment in a good area of ​​the city and start renting it out, then annually you will receive no more than 5-6% of the money invested. It's not much, but it's stable.

Financially savvy investors rarely buy or invest in real estate with their own personal money. They use financial leverage:

• DDL - other people's money,
• VDL is the time of other people.

Experienced investors recommend being very careful with other people's money, because under unfavorable circumstances, you may lose more to the widow. DDL can include money from banks, private investors, and partners. You can also try to borrow money from your friends or relatives for a while.

The next question arises: where to find real estate that will be in very poor condition and cost little. We need to look for such options. The Internet will be a great help. Pay special attention to advertisements like: selling urgently, urgently need money, moving, etc.

A good property for most novice investors, according to experts, is a one-room or two-room apartment. Some people prefer a one-room apartment, others a two-room apartment.

How to find a property to invest in and make money

We need to look for options where there is a pronounced accident rate. Why should you look for such apartments? In this case, you can significantly reduce the initial price of the apartment.

You can buy an apartment in a building under construction from a construction company at an early stage of construction. As a rule, prices for new buildings are 25-30% lower than similar finished housing. Moreover, at the excavation stage and by selling it after putting the property (residential building) into operation and registering it as ownership, you can earn up to 40% or even more percent.

There is another way to find an apartment cheaper than its market value - this is to buy an apartment pledged to the bank/mortgage. Typically, such apartments are sold by people who are unable to continue paying their mortgage loans. These borrowers are ready to reduce the price of their real estate up to 20% and more. Why the price is decreasing and all the intricacies of selling an apartment, read the article -. By reselling such property, you can also make good and quick money on real estate.

Of course, these are not all ways to make money in real estate; there are much more reliable and long-term methods of investing in real estate, where the profitability will be constantly high every year, and this income will be passive.

On the website you will find other profitable real estate investment schemes where you can start earning money with minimal investment of your own funds.

Today, every educated person knows that economic instability and depreciation of monetary assets can nullify all efforts to form capital and “eat up” a large part of personal finances. Therefore, many entrepreneurs and businessmen use a reliable and safe type of investment -. It is no secret that liquid housing and buildings today have the most stable value, unlike shares, vouchers and other securities. In addition, they allow you to receive constant income, for example from renting out apartments or office space.

Real estate in Russia

Over the past few years, many real estate properties in Russia (and these are not only luxury houses and country cottages) have become an integral part of the investment market. Even the political and economic situation in the country cannot affect investments in real estate; in any case, this option remains the most optimal for preserving your own funds and increasing capital.

Domestic and foreign experts unanimously say that today investing in real estate is the most reliable way to invest money.

However, when investing your funds in real estate, it is important to remember that any financial transactions must take into account several important elements of the investment process: established investment terms, size and form of investment, associated risk factors and clearly planned expected profit.

Investment or safety of money?

Investments in commercial real estate

Residential real estate in large cities is of particular interest and value today, since business flourishes much faster in large cities. That is why buying apartments, houses and other commercial premises located in the capital or in large Russian cities and their environs is much more profitable than buying real estate that is more luxurious and expensive in status, for example, somewhere in the provinces.

Investing in commercial premises, shopping malls, business centers and entertainment centers is an excellent opportunity to save your funds and make a profit over a long period of time. Since the well-being of city residents is gradually growing, every year they can spend more and more money on purchasing various necessary things and on entertainment. Investing in commercial real estate brings profit literally immediately, since powerful working capital is involved. Thus, investors who have free finances or take out a loan can invest their funds in shopping centers or entertainment complexes.

Investments in residential real estate

Purchasing apartments, country houses and cottages is also considered a fairly profitable area for investing your own funds. Over the 20 years of the introduction of private property in Russia, real estate prices have increased tenfold and have a constant upward trend. Of course, there were periods when the fall in housing prices was quite natural, for example, during the default or during the global financial crisis. However, after a few years they returned to their previous level, and then continued to grow steadily.

Should I invest money in real estate?

Today, prices for residential real estate in Russia are growing by about 3-5% per year. Thus, an investor, purchasing an inexpensive apartment in St. Petersburg (for example, for 5 million rubles) can receive a good profit in the amount of 150-200 thousand rubles per year. If it is possible to rent out this apartment, then in a year you can add about 200 thousand rubles to this amount (rent is 18-20 thousand rubles per month). Thus, investing in real estate in St. Petersburg can range from 400 to 500 thousand rubles per year. Of course, on this amount you will have to pay tax on profits from the sale of real estate and rental, but the income will still be very significant.

Experts say that it is best to pay attention to small apartments. Thus, standard one- and two-room apartments in ordinary houses are considered the most popular today. Such housing is most often bought or sold, and also rented.

The most profitable investment option today is to purchase an apartment on the primary market (in a building under construction), since its cost will be significantly lower than the cost of an already habitable apartment in the same area. However, in this case the risks are quite high. Calculating economic profit in this case is quite difficult for the reason that almost no construction organization today delivers the project on time and can easily freeze construction for a year or two.

The rent from one apartment can bring the owner an additional 7-10% per annum of its value. To calculate the potential profit in this case, it is important to take into account all additional expenses: utility bills, furnishings, household items, property taxes and other expenses.

Investments in land

Buying land is the most profitable financial investment of the last century; entrepreneurs especially often used it before the onset of the global financial crisis. Subsequently, their acquisition became no longer so profitable, for the reason that many businessmen are still trying to get rid of illiquid land plots. This is due to the fact that during the financial crisis, many construction projects in the domestic suburban real estate market were frozen.

Today, an investor who is going to invest his finances in land must decide, independently or with the help of authoritative sources, which of the plots will be in demand in the future and which will not. The land plot must be in demand on the market, and purchase and sale transactions involving it must be implemented as quickly as possible. The most stable in this case are plots that are intended for individual construction and agricultural development, especially if there is permission to use them as a summer cottage.

Investments in foreign real estate

Foreign real estate has recently become an excellent source of permanent income. These can be initial construction projects or already completed buildings, which can be rented out immediately after purchase. It is important to take into account that many European countries have a fairly low level of economy, and therefore are significantly inferior in this regard to large Russian cities. Even small investments in construction or real estate in such countries can be quite profitable for our compatriots.

However, the risks associated with purchasing foreign real estate are quite high. It is impossible to calculate all the nuances and see all the pitfalls, since countries with unstable economies have a rather unreliable real estate market. The price of buildings over the coming years will depend on the political and economic situation in these regions, so it will be quite difficult to predict the level of profit from.

Is it profitable to take out a loan to invest in real estate?

Today every person strives to earn money, and therefore a completely reasonable question arises: is it profitable to take? How beneficial is this for a private investor? In fact, bank interest rates are quite high, and rising real estate prices and certain risks are often not worth investing loan funds in real estate. This applies to private investors.

However, a development or construction company may well take out a loan to invest in real estate. Based on statistical data, it can be argued that purchasing housing in some regions today is a fairly profitable enterprise. Thus, profit from real estate under construction can reach 200-300% per year. In any case, determining the investment attractiveness of a construction project as a source of profit is quite difficult even for a specialist. This will require drawing up a forecast that will take into account all trends in the development of the real estate market.

Pros and cons of investing in real estate

Should I invest money in real estate? — Today, many investors authoritatively declare that investing in real estate is one of the worthy types of investment. There is an opinion that real estate is constantly growing in price, and therefore makes it possible to invest in it with virtually no risk. In fact, investing in real estate is just one type of investment, which, like all others, has its own specifics and well-defined pros and cons.

One of the features of investing in real estate is the mandatory ownership of a large initial capital. To buy a house or apartment, it is not enough to have two or three thousand dollars on hand. However, the modern real estate market has fairly developed mechanisms that allow even small investors to invest in housing.

In this case, we are talking about financial investments in construction projects in the early stages or in non-commercial premises. Naturally, the value of real estate is constantly growing as construction progresses, and the profit from such an investment can be very significant. A fairly promising type of investment is the construction of garages, warehouses and their subsequent resale.

Such investments will cost an order of magnitude lower compared to apartments, and will bring much more profit. In addition, if you compare the prices of apartments and garages, it turns out that the ratio of rent to the market value of a garage will be much more favorable than the same ratio when buying an apartment.

Thus, by investing a small amount in the purchase of a garage for its subsequent rental, the investor will recoup his funds much faster than if he invested in the purchase of an apartment for the same purpose. Of course, when purchasing, many important factors must be taken into account, for example, the specifics of the region, the quality of real estate, the relationship between supply and demand, as well as other market realities.

It is also impossible to say about the accuracy of the profit, since this percentage is quite vague and depends on the specific situation.

For example, a one-room apartment in a good area can rise in price by only 10% in 5 years, while an investment in building a garage not far from new houses under construction can bring in more than 50% in just a year.

Hello. In this article we will talk about investing in real estate.

Today you will learn:

• Why investing in real estate is profitable;
• What types of real estate are there?
• What real estate can and should be invested in;
• How you can earn money with a minimum investment.

Investments in real estate have long been considered one of the most reliable. In people's minds, real estate is associated with reliability and constant rising prices. But is this really so? Is it profitable to invest in real estate given the realities of today's market?

Real estate investment goals

Money should make money. This most important principle of investing was formally formulated in the late 17th century. And despite his age, he is still relevant.

That's why any investment purpose - receiving income.

Real estate investing also has this goal.

Intermediate goals (ways in which you can earn income) are:

• Obtaining property for renting it out;
• Resale of property;

The first of these methods is much more stable and accurate. Almost any real estate can be guaranteed to be rented out, regardless of its type and quality. This is the most stable and low-income method of investment, with the exception of a bank deposit.

Earning money from the resale of real estate is a more interesting, risky and valuable way to earn money. It is quite difficult to resell real estate purchased for less money, but nevertheless, regardless of the economic situation, some real estate continues to rise in price.

But most investors prefer to rent out real estate for the first time and receive funds spent on investments, and after that think about selling it.

This method allows you to maximize your income because:

An apartment in Moscow costs 10 million. Every year its cost increases by 5% - 500 thousand rubles. They pay 60 thousand rubles – 720 thousand rubles for rent. Total income is 1 million 220 thousand rubles or 12% per annum.

Types of real estate investments

Real estate investment refers to .

There are four main types of real estate investments:

• Investments in commercial real estate;
• Investments in residential real estate;
• Investments in real estate construction;
• Investments in real estate abroad.

Each of them has its own characteristics and distinctive features, which characterize not only the real estate itself as an investment object, but also as a whole approach to investing money. Each of them differs in its own risks that the investor takes, strategies, and, accordingly, profit.

Investments in residential real estate

Investment in residential real estate means the purchase of:

• Rooms;
• Apartments;
• Houses;
• And other residential premises.

Residential real estate is good because the barrier to entry into this investment is quite low, the risks are minimal, and the investment is guaranteed to pay off. But at the same time, you can’t count on large short-term income.

The minimum investment amount varies greatly depending on the region.

Statistical fact : the price of residential real estate has fallen only 3 times in the entire modern history of Russia. In 1998, due to default, in 2008-2009, due to the global real estate crisis, and in 2015-2016, due to the Russian crisis. Over all the years since the beginning of the 90s, on average, the price of residential real estate has increased by 3-5% per year.

How can you make money on residential real estate? The first and main way is renting. As a landlord, you can earn from 120 to 300 thousand rubles a year without putting any effort into it. The second way is to increase the value of real estate over time. If an apartment costs 1,000,000 rubles when purchased, then we can safely say that after 3 years it will already cost 1,100,000 rubles.

The return on investment is quite long. In order to fully recoup the investment and achieve a net profit, it will take about 8-10 years, depending on the economic situation and the region. At the same time, you can start receiving stable deductions already in the first or second month after purchasing a home. But when investing in housing, you will need to make minimal repairs, attract good tenants, and make sure that nothing happens to the property.

The rise in housing prices depends very much on the region. In actively developing regions like the Belgorod region, real estate prices are growing faster due to the constant influx of new people. You should carefully select the region in which you want to invest.

It should be remembered that when investing in real estate, you should not buy a large home. Medium 1-2 room apartments are ideal, they are not as expensive as large ones, and therefore are in much greater demand.

Investments in commercial real estate

Investments in commercial real estate are a more complex type of investment that will require the investor to have good knowledge and analytical skills.

Commercial real estate as an investment object includes:

• The shops;
• Bars;
• Restaurants;
• Warehouses;
• Offices;
• Other premises.

Commercial real estate is used by other entrepreneurs or companies to make a profit. Profit also comes from renting out premises, as well as from a possible increase in the value of commercial real estate. But if living space is steadily becoming more expensive, then with commerce everything is not so simple.

Commercial real estate has been firmly showing negative price dynamics over the past few years, while demonstrating a huge drop in demand. This, of course, is due to the crisis, but also to the lack of development of small and medium-sized businesses, which primarily need rent.

A distinctive feature of commercial real estate is the high barrier to entry into business. Private individuals will no longer be able to simply buy an office or bar and rent it out. The problem of finding clients is also very acute for entrepreneurs. After all, contracts are concluded long-term, and a dilemma arises: either look for a more advantageous offer, or work with this particular client.

The risks are also quite high. Choosing a suitable property for a beginner is quite difficult, and you will also need to make competent repairs, attract the right clients and conclude a contract with them. The income in commercial real estate is much higher than in residential real estate, but the payback period remains the same: 8-10 years.

Investing in construction

The riskiest and most profitable type of real estate investment. It can be divided into two large categories: investment in the usual sense, and purchasing housing at an early stage of construction.

In the first case, a person invests his money in construction work, and after its completion, depending on the share, he receives a profit. A familiar scheme for all investors, and there is nothing new in it. Profit is determined according to investment.

The second method is much more interesting. Some construction companies sell apartments in their buildings even before they are built. This helps to attract additional funds for construction and complete the work. Such apartments are usually ready in 1-2 years, and the price at the time of their readiness is 1.5-2 times higher than the original one. But, it should be remembered that investing in construction is a much riskier activity than purchasing finished real estate.

You need to invest in construction wisely, studying every legal and economic aspect of the company, its reliability, experience in the market and reviews. With good investment, you can both win on the difference between the purchase price and the sale price, and get real estate at a lower cost, thereby reducing acquisition costs.

When drawing up and signing an agreement with a construction company, it is recommended to seek advice from a lawyer. He will be able to tell you whether this company is reliable, draw up a contract correctly, and if something goes wrong, then get advice.

Comparative characteristics of types of investments

In order to better understand what is more profitable for you, we will present you with a comparative description of the types of investments:

As you can see, investing in commercial and residential real estate is suitable for both beginners and intermediate-experienced investors due to its simplicity and average stability. But despite this, the most profitable, in terms of payback, is investing in construction. And it is also the most risky.

Investing in residential real estate is suitable for everyone due to its high stability. There is no need to think that the investment will not pay off. They are guaranteed to generate income, regardless of the circumstances.f

Pros and cons of investing in real estate

Now about each point in a little more detail:

Pros:

Stability. It's hard to argue with this. Investments in real estate are one of the most reliable and stable sources of income. Regardless of the time of year, economic and political situation, housing and business sites are always needed by everyone.

Constant growth in asset values. Typically typical for residential real estate. Over a long distance, real estate behaves like gold – it steadily and confidently increases in value.

Passive source of income. By renting out real estate, or waiting for the price to rise, the investor spends a minimal amount of effort.

Minimal risks. As follows from the second point, housing and a place for business are always needed, so even in the most unfavorable times for the economy, there will be an opportunity to sell real estate or rent it out.

Minuses:

Illiquid investment object. Liquidity is the ability of an object to quickly turn into money without loss of value. Low liquidity of real estate means that it is difficult to sell it for its real value. Of course, you can sell an apartment/shop/any other premises very quickly by making a big discount, but this only indicates low liquidity and, accordingly, difficulty in selling.

Long payback. The most significant disadvantage of all. A payback period of 8-10 years is quite long even for long-term investment. Medium and small businesses pay for themselves in a period of 1 month to 2 years. And the financial investments there are the same.

Fixed maintenance costs. Utility bills and other expenses, if they are not borne by the tenant, fall on the shoulders of the investor. They significantly reduce income, forcing you to spend additional money.

The property owner will have to pay property taxes, when leasing, either income tax (if it is an organization) or (personal income tax). And after selling the property, you will also need to pay taxes, which makes the amount of income less by 13%.

It is up to each investor to decide what will outweigh - stability and constancy, or low liquidity, income and payback.

We have prepared five tips for novice investors:

Tip 1. You need to decide in advance on your financial capabilities and investment object. The subsequent strategy, investment of funds, or payback period will completely depend on this. The investor himself must understand how much money he has and what kind of real estate he can count on with it.

Choosing an investment object is the most difficult thing, because you need to understand that each type of real estate brings different income, different risks and different obligations.

Tip 2. Carefully study the real estate market and find an offer. Investments are an almost constant analysis, which is why you don’t need to rush to look for real estate for investment immediately after receiving money. You need to carefully study the offers that people make, see where the demand is, and so on.

Local and Russian ad platforms like Avito are ideal for this, where some people will help you understand what is for sale, and others what is rented. And based on this knowledge, you will need to find an object that will not have the highest price and will be in sufficient demand.

Tip 3. If possible, avoid using intermediaries. This applies more to residential property investments. Many people use the services of realtors when searching for an investment property. This is a fundamentally wrong approach. The realtor's job is to sell, your job is to buy. And here a conflict of interest arises, which should be avoided.

A complete comprehensive analysis of the real estate market can give an understanding of where to look for a good apartment.

Tip 4. It is necessary to use the services of a lawyer. It is best to entrust the drafting of contracts to a professional. After all, even a lease is best formalized legally. Yes, a decent part of the income is lost, but at the same time, if any audit occurs, you don’t have to be afraid of the unpleasant consequences that are guaranteed to arise if there is no contract and payment of taxes.

A personal lawyer will also be required when concluding an agreement with a construction company. It will help you understand the reliability of the company, point out controversial issues and vulnerabilities in the contract, and help protect your rights if such a need suddenly arises. Investment activity always requires a good lawyer who will help you understand all the legislative intricacies.

Tip 5. You need to forget about instant profits. Investments in real estate are long-term investments, and therefore they take a long time to pay off. Profit from resale can be obtained in 2-3 years, but rental income only in 6-9. This is why you should forget about making quick and easy money.

A few words about risks

Like any investment activity, investing in real estate is fraught with considerable risks. A few words about risks in Russian realities.

Mortgage risk. In Russia, the crisis of 2008-2009 was not as severe as in the rest of the world. Real estate fell in price, but not as much as in Europe and America. This is due to the fact that mortgages came to the Russian market quite late, only at the beginning of the 2000s.

The fall in prices in 2015-2016, in addition to the Russian crisis, is associated with the fact that the period for payments on 10-year mortgages has approached, and the default rate has increased noticeably. It is unknown what will happen when the 15- and 20-year terms come up, because in America, towards the repayment period, a crisis on a global scale broke out.

Housing risk. It is unknown whether the price minimum has now actually passed, or whether the cost of residential real estate has been unreasonably rising throughout the entire period of time. It is the issue with the minimum price that makes us talk about the riskiness of current investments in residential real estate.

You need to carefully monitor the situation, and as soon as it becomes clear whether real estate will continue to grow or show negative dynamics, then make decisions about investing in housing.

Risk in construction. There is no need to talk much about construction. Fake developers, double sales of apartments, and many other fraudulent schemes, which many people know firsthand.

Investing in houses under construction is really profitable, and it brings in a lot more money, but you need to weigh the risks, carefully study the companies and only then make decisions about investing in construction.

How to invest with minimal funds

Investing in real estate still requires much higher costs than other methods.

If there is not enough money, you can use one of the following methods:

Raising money. The most popular way to raise funds to purchase real estate is a mortgage. Loan secured by real estate. In the Russian understanding, this is a loan for real estate, secured by the same real estate.

Most banks will be happy to provide a mortgage. This will require a stable source of income, a good credit history, and a package of documents, which varies depending on the banks.

Depending on the banks, term, reliability and financial condition of the borrower, interest rates will vary. Basically, 11-17% per annum is provided for mortgages, and 5-7% - if there is a loan in foreign currency.

The good thing about this method is that you can pay your monthly mortgage payments with the money you get from rent. If you purchase wisely and rent at a favorable price, you can obtain ownership of the property for free, the loan for which will be paid by the tenant.

Attracting co-investors. In Russia, the idea of ​​joint investment is just developing, which is why there is no need to talk about this method seriously yet.

Very rarely do investors have the opportunity to actually find partners who will be willing to claim in equal shares (or depending on the contribution) the income from real estate without interfering with the profit. At the same time, the opportunity to involve friends or relatives in an investment project will make investments smaller and noticeably more profitable.

Joining the Investors Club. There are many communities where investors are looking for like-minded people who can help each other not only with advice, but also financially. In such clubs there are many people who, on investment terms, can invest in your project, and this way you can earn independent income and provide profits to your partners.

This is also a fairly new idea for Russia. It consists of collective financing. You can launch a project that will attract investments so that you can invest them in real estate.

The investment project will have to work as a whole joint stock company - people will buy shares in this project and count on profit. Suitable for the purchase and rental of commercial real estate, and subsequent sale.

Raising funds to purchase real estate on your own is quite difficult. That is why beginners are recommended to attract partners by any available means. More experienced investors will be able not only to invest funds, but also to guide them in the right direction, helping and training at first. This is a much more valuable experience, even more important than making a profit.

Robert Kiyosaki - one of the world's most famous businessmen and self-development trainers, wrote a book that every real estate investor must read. It’s called “Real Estate Investments”.

It provides a detailed strategy for those who want to invest in real estate and own 5-6 properties by the age of 40, and have a stable passive income without doing practically anything. The book is full of interesting things and pitfalls. It will be useful to everyone, even though it is more adapted to Western and Eastern realities than to Russian and CIS countries.

Summing up the conclusion : Real estate investment is one of the most talked about and popular way of investment among ordinary people. It is characterized by minimal requirements for investor experience, but is extremely demanding on the wallet. The return on investment in real estate is 2-9 years, depending on the chosen method of income.

A large category of people are interested in preserving and increasing their funds in conditions of financial instability and rising inflation. Buying real estate is a worthy investment for investors; activity in this market segment is almost always present. The question of which property is better to invest in is of interest to many potential buyers.

The real estate market offers a wide selection of apartments from different segments. One-room apartments with a budget cost of up to 30,000 USD are always in demand. Such apartments can be bought in a residential area or in the popular category of new buildings. Buying an apartment on the secondary housing market has advantages for those investors who want to immediately start using square meters.

Profitable long-term or daily rental will allow you to receive a guaranteed income that will exceed the interest on a bank deposit.

Realtors and real estate agency specialists will help you figure out how to choose the right investment property.

Investments in secondary real estate are justified if you plan to make a quick profit

Purchasing real estate is not an easy task; the investment will pay off if the selection of the property is made taking into account the location of the house, distance from the central streets of the city, availability of infrastructure and transport links. Real estate market specialists note a drop in demand for housing among investors. This is quite justified, since the fall in housing prices is more than 10%, and accordingly, rental yields are also not growing.

The situation on the primary real estate market

The market preference for new buildings over old housing is obvious: square meters purchased at the initial stage of construction are guaranteed to increase in price. The prospect of further appreciation of real estate in this segment has been steadily demonstrated in recent years.

It is much more profitable to rent out a one- or two-room newly renovated building in a prestigious residential complex. Such an investment is justified; the investment will pay off in a few years. The popularity of such acquisitions has only increased in recent years, expanding the types of earnings in real estate. Today the following operations are the most popular:

1. Buying a studio and renting it out daily.
2. Buying an apartment with the prospect of renting housing for a long period.
3. Purchasing a townhouse for long-term or seasonal rental.
4. Buying a cottage for rent or subletting.
5. Construction of a small apartment building for the purpose of selling housing.
6. Purchase of several apartments on the ground floor to create a hostel.

These and many other market operations provide answers to questions about how to invest in real estate. The demand for rental budget housing is always high.

No less interesting are the offers for long-term or seasonal rental of large apartments and prestigious cottages. Representatives of large companies and businessmen consider such proposals to resolve business issues or while on vacation with their families.

Investing in real estate under construction helps to obtain greater profits

Cost-effectiveness and reliability

The income received from renting residential real estate ranges from 12 to 15%. Such a deal is considered profitable. The benefits, stability, and safety of investing in the developing real estate market attract the attention of not only individuals, but also serious investors willing to invest large sums.

By analyzing which real estate is profitable to invest in, we can confidently talk about the profitability of modern complexes under construction, commercial premises, and foreign objects.

A transaction on the primary market provides approximately 30% savings on the cost of the property as delivered.

Another popular segment is commercial real estate. A wise investment will provide stable, high profits in the future. The purchase procedure at the start of construction is practically no different from other types of transactions. The main task is to choose a reliable developer with a good reputation. Such construction companies are interested in attracting investors; the deadlines for putting the project into operation are, as a rule, respected.

Investing in real estate is rather a long-term project; you should not expect quick profits. The time it will take to complete construction and carry out repair work may take longer. It is possible to sell finished housing profitably under a successful set of circumstances, when the built complex becomes known and receives a good reputation.

Procedure for purchasing an apartment

The desire for financial stability and success is justified. Real estate has been considered a symbol of prosperity since ancient times. In order to avoid unsuccessful purchases, you need to understand how to properly complete a purchase by using the services of professionals. Any investment requires preliminary preparation and study of the market features.

The transaction for registration of the selected housing is carried out strictly in accordance with the laws of the state in which the purchase takes place. Typically, these are the following steps:

1. Having chosen a suitable object, you must sign a deposit agreement, transferring part of the total cost to the owner. The standard amount should not exceed 10% of the stated price.
2. Checking documents confirming the ownership of the apartment owners. The collection of documents is usually carried out by specialists.
3. Registration of a technical passport for the alienated property.
4. Payment of duties and mandatory tax payments approved by law.
5. Signing a bilateral contract for the purchase and sale of real estate.
6. Registration of property rights of the new owner.
7. Transactions to formalize the transfer of rights to housing are carried out by notaries in notary offices. To carry out such an operation, it will take time to collect title documents, check that there is no arrest on the alienated object and some other special documents.

Investing in real estate will be highly profitable with a thorough analysis of risks and profitability for a specific object

Pros and cons of investing in real estate

When choosing where to invest funds, a competent investor understands the benefits of purchasing real estate. The undeniable priorities of this business include the following:

• reliability of investment;
• demand for goods in any economic situation;
• the possibility of stable receipt of profit from invested funds.

When thinking about which property to invest in, you should understand that in any area of ​​financial activity there are hidden risks. They can be identified by the following factors:

• long-term turnover of funds;
• fluctuations in the level of profitability depending on the economic situation;
• If you choose the wrong object, the desired level of income may not meet expectations.

What is meant by these factors? The reliability of investing in real estate is due to the fact that this type of business does not belong to the high risk group of financial pyramids, which can disappear, cease to exist and simply go bankrupt.

In a situation where the situation requires the withdrawal and cashing of a certain amount, the apartment can always be sold. The real estate market is active in any situation, the need for housing is quite high.

Among the disadvantages, we can note that before making a purchase, you should carefully select the right investment object.

Purchase of 1 room. apartments in Moscow within a 5-minute walk from the metro will provide an income of at least 20% per annum of the invested amount. If you choose the wrong investment object, the percentage may not rise above 8%.

Another type of high-risk investment is an old fund that is being demolished. Such housing will not meet the buyer’s expectations, just like an apartment in a commune.

Investing in real estate has its advantages and disadvantages

Features of real estate investment

Today, many consider investing in residential and commercial real estate as one of the stable and profitable types of business. The arguments are that this is a risk-free financial activity that brings stable income. But not everyone can afford to purchase the desired square meters due to a number of circumstances.

The first condition for a successful start is the presence of solid capital.

It is not worth taking out a bank loan for subsequent investment; in this case, the profit that should come from the operation will go to paying off bank debt. Small investors may consider buying an apartment together. At the initial stage, this practice is quite acceptable among people who know each other well and have mutual trust.

Investors who are considering investing in a short-term home purchase are unlikely to find their niche in real estate. This is due to market characteristics, seasonal fluctuations and other factors. It is not always possible to sell an apartment quickly and profitably. Fast turnover is not typical for this type of business. At the same time, reliable protection of invested amounts from inflation attracts new investors.

When considering a mortgage for housing construction, you can think about whether this type of long-term lending is suitable in each individual case. The low interest rate and the opportunity to invest in a new building attract attention. Depending on the investor's financial income, such a transaction may be profitable. If we are talking about a cottage in a prestigious country village, the profitability in the future promises to be high.

The specifics of operations for generating rental income also have some fluctuations. Thus, the amount of profit is influenced by such characteristic reasons as the location of the property, the rental season, and the economic situation in the region. You can understand all the intricacies of doing business in this area if you have experience and knowledge.

Constant changes in legislation that regulate the real estate market introduce some restrictions and new taxes, which also have an impact on the situation as a whole. For those who have decided to invest in real estate for the first time, it is worth carefully studying the different sides of the issue. Perhaps a financial consultant will suggest another type of activity that brings a stable income.

Income from investing in real estate will be high with a competent approach to investing

Real Estate Investment Goals

Those who are considering the real estate market, regardless of type and category - residential or commercial, in general, there are two main goals:

1. Receiving income from rental.
2. Receiving income from resale.

When calculating the benefits of an investment, the investor tries to predict what benefits he will receive from the upcoming transaction. Resale is of interest to those who use the most risky form of income generation - investments at the initial stage of construction. On the pit, the price per square meter is the most interesting. A building ready for commissioning is more attractive to buyers; the price of the property is much higher.

Renting is a quieter and longer-term form of income generation. Guaranteed income makes it possible to preserve the main capital and receive high interest in the form of rent. Regardless of the country in which such an investment is located, the investor has a stable income that can invest in a new object.

Considering real estate as an investment instrument, it is worth noting its reliability, stability, and high attractiveness. Wealthy, respectable people with a long-term program for generating profits in different segments of this type of activity can afford this type of business.

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