In Ukraine, the market is currently idle due to the post-quarantine crisis. People are afraid to invest money in something and save capital until the best times.
Does it make sense to buy something now? Can an apartment in Kyiv bought for rent in 2020 be a good investment? Let's watch a video with Kostyantyn Pysarenko and analyze the cases of Ukrainian investors compared to Miami, London and the Arab Emirates.
Let's immediately point out that there are two motives for buying real estate. It is "for yourself" and "for rent".
Constantine (founder of the elite real estate agency The Capital): If we are looking for an apartment for ourselves, then in any case "Want more than it hurts" works here. By the way, if you are thinking about buying real estate, we recommend that you contact us professional luxury real estate agency THE Capital.
Each apartment is unique, especially if it is renovated. Therefore, if you really like a particular apartment, you should take it right away, because later it may not be available.
Volodymyr (Director of real estate agency The Capital Lipki): Regarding the profitability of real estate investments. We calculated that there is a fairly high profitability in Ukraine. How do you look at it now?
TO: I believe that the profitability of our market is one of the highest
Profitability is calculated as a ratio. This is the number of months for which the apartment is paid off after purchase when renting it out. In our country, this ratio is 120 on average. But ideally, you can find even 80-100. There are no such rental rates abroad.
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Take, for example, Miami. We take $3500 a month there. Of them, they paid about $900 to the house and $1000 in taxes. $1600 of income comes out. Multiply by 12 months - $19200 is obtained. For an apartment worth $1, it is 000%. Our worst options are 000-1,9% annual.
Out of a million, we have $8000 a month in rent, right? Multiply by 12 months - we get $96. Take away official taxes - and there remains at least $000. This is more than eight percent of profitability per year.
В: But fluctuations in the selling price. There they are not there - there is stable growth. And we have had it since 2008, since the last global crisis...
TO: Well, you know, I don't see stable growth. If we take the same Miami, new technologies appear, new houses, and repairs become outdated, so to say that a person bought for a million dollars, and that he will sell it ten years later for $1, I highly doubt it. If he buys for a million and sells in ten years for a million without any special investments, that is already good.
Read also: How much does it cost to renew an apartment in Ukraine in 2021?
В: If you remember the example given by London, sometimes the rent goes into the red due to high rates, taxes and operating fees. That is, people buy real estate in London and do not receive income from it.
TO: The Emirates market deserves attention, but there are several nuances. That is, first of all, these are the Emirates. Not everyone can withstand the temperature regime. Not everyone can withstand these five months from March to September. Many cannot stand it. Accordingly, these apartments can be rented only to those who specifically work there.
There is also a nuance when renting. From 30 to 50 percent you will pay for service. Simply by giving the apartment to the service agency. Because otherwise you will have to go there every time to check. As a result, the annual yield is no more than five percent. In any case, there are more in Ukraine. Was the publication interesting and useful? Subscribe to our real estate blog updates and get the latest posts from THE Capital real estate agency.
