Most experts predict serious changes in the financial sphere, talking about the continuation of the crisis in 2020-2021. In such conditions, it is the right time to decide to invest in order not only to preserve, but also to try to increase your capital and its purchasing power.
In the TOP of the most common questions is whether it is worth investing in real estate. On the one hand, there is instability in the country, and not only in the economy, but also in politics. On the other hand, choosing a profitable investment object is not always easy and simple. Therefore, let's talk about where it makes sense and how to invest money in real estate. By the way, if you decide buy a house in Kyiv, we recommend contacting the best elite real estate agency THE Capital.
Is it worth investing in real estate?
Even with high risks, such an investment is worth paying attention to. Keeping your finances "under the mattress" will not bring a good result, because any currency has a tendency to depreciate, and in addition to inflation, this can be affected by various factors. How to start investing in real estate? First of all, you need to abandon impulsive actions and analyze the entire investment market, evaluating all the pros and cons of each direction, for example:
- Bank deposit. According to the Ministry of Finance, the income from a dollar deposit is no more than 2%, a hryvnia deposit can bring up to 10%, but there is even a risk of losses due to inflation.
- Cryptocurrency, stocks, startups and other high-risk investments. In this case, newcomers are often based only on trust and focus on the promised percentage of profit. Those who ponder whether it is profitable to invest in real estate and end up choosing risky directions are more likely to lose their money as a result. For example, only about 10% of startups are successful and operate for more than a year. Investing in shares requires up-to-date knowledge in the field of economics and finance, and cryptocurrencies have long shown instability, significantly "jumping" in price.
- Precious metals are one of the risk-free investment options, but the profitability cannot be called high either. In addition, gold should be invested only if you have a large budget.
Read also: What is self-build and how to legalize it?
In order to understand how to properly invest in real estate, it is important to study the market. Buying square meters is a worthy and profitable choice. In addition, housing is much clearer, even if you are facing this issue for the first time. To understand how to invest in real estate, it is not necessary to study the work of banks, to study the dynamics of securities or currency depending on the financial and political situation in the country. Let's understand in more detail.
Which real estate is profitable to invest in today: getting to know the options
Before figuring out how to invest in real estate in Ukraine, you need to understand that there are three options:
Not every home can be a source of great profit. When thinking about whether it is profitable to invest in real estate, you must first assess its useful life. The modern secondary is very outdated, and technically many objects are not subject to exploitation. New buildings are actively capturing the market, but regardless of the choice of object type, it is also important to understand why you need to invest money in real estate and what amount you will have to invest.
Real estate resale
In this case, it is profitable to buy an apartment at the construction stage, preferably at the excavation stage. Statistics show that in this case the complete object will cost up to 40% cheaper! For example, in the residential complex "Respublika" in the Holosiivskyi district, in the first houses of the residential complex at the initial stages of construction, the cost per meter was about 800 dollars. At the time of commissioning, the price of a meter increased to 1200-1300 dollars. That is, you could earn about 400-500 dollars on the transfer.
See also: Where is it better to buy an apartment: in a new building or on the secondary market?
Now, when the territory of the complex is in order, a significant part of the buildings are occupied, the prices of apartments in the new rows start from 1480 dollars, while ready-made apartments without decoration are sold for 2000.
It is not difficult to guess why it is profitable to invest in real estate in this case - the difference in value is more than 20% per year, since the first houses in the residential complex were ready in about 2 years.
Buying real estate for resale is a risky activity, because the construction can turn into a long-term construction, even in an optimistic forecast, the terms of putting the real estate into operation can be delayed by six months. Therefore, before concluding a purchase agreement, you need to make sure of the integrity of the construction company and all the permits.
Investing in real estate for long-term rental
At the peak of the popularity of studio, one-bedroom and two-bedroom apartments, it is an excellent option for long-term rental with the aim of obtaining a stable monthly income. Is it worth investing in real estate in Ukraine? For example, we will give simple calculations:
- Apartment with an area of 30 square meters. meter will cost approximately $30.
- Approximately $8000-$10 will need to be spent on furnishings - repairs, appliances, furniture.
- After renting out a small apartment for a month, it will provide an income of $350.
- The annual income will be about $4000, of which up to 10% will need to be spent on apartment depreciation and taxes.
Thus, investments will pay off in about 8-9 years.
Daily rental of real estate
When talking about which real estate is better to invest money in for its further daily rental, it is worth considering small apartments, for example, one-room apartments and studios. Their cost varies from $25-000 + furniture and decoration - about $35. The cost of renting real estate per day is $000-10. When renting an apartment for even half a day a year, the monthly cost will be $000, or more than $25 a year, including utilities and depreciation. In this case, a small apartment for daily rent will pay for itself in 30-375 years.
Where to invest in real estate: does it make sense to invest in land
Speaking of real estate, it is worth considering investment in land plots and ready-made individual houses. Land is an asset that can be valued in different ways, so it is important to consider:
- location of the object;
- his condition;
- features of future operation.
When thinking about whether it is profitable to invest in real estate, you should first pay attention to the location of the plot. If it is located in the suburbs of a millionaire city, it is an asset with a positive trend of increasing value. However, the perspective concerns primarily land for construction - residential, industrial. As a result, a ready object, including one where you can produce (grow) something, can become a good source of income and quick return on investment in the future.
How to better invest in real estate: several important stages
When experts advise "invest in real estate", they first of all assume a careful study of all the pitfalls and step-by-step actions of the investor.
Study of market trends
Since investing in real estate involves a long payback period, the initial step of the budget owner is to identify long-term trends in detail. In other words, you need to find out whether it is worth investing in real estate now and forecast for the future - at least 15 years. The following factors are taken into account:
- location of the object;
- real estate condition;
- how the object is planned to be used.
For example, on the outskirts of Kyiv, in new residential complexes, two-room apartments become more expensive the fastest after handing over the object, then one-room apartments, and three-room apartments and more spacious objects are the cheapest.
Study of tax legislation and the basics of documentary literacy
When understanding why it is profitable to invest in real estate, a person must understand that the implementation of the purchase agreement and further costs related to the current legislation await him.
- State tax on the sale of real estate is 1% of the transaction amount.
- Payment of state duty to the pension fund — 1% of the amount of the agreement.
Also, the cost budget should include payment for the work of the company that accompanied the agreement, which will take into account additional costs related to the organization of the purchase and sale. If you contact the specialists of our company, they discuss all the nuances in advance and accompany the client at all stages of the transaction. We are also ready to undertake the legal aspects of concluding a contract with the seller - it is important to properly take into account the interests of all parties and prevent risks.
We inspect the attachment object correctly
What does it mean to invest in real estate? This means being able to correctly evaluate it!
- For example, a cottage and a plot of land should be inspected in winter or in March, because in the warm season such objects have a presentable appearance and all the flaws of the land, its surroundings and defects in the driveways are not visible.
- Apartments on the secondary market require not only a thorough and reliable inspection, but also a high-quality legal check to exclude fraud.
- Primary housing should be purchased at the construction stages, taking into account the convenience of planning and the benefit of location. And after handing over the house, the price per sq. meters will inevitably grow anyway!
How to start investing in real estate if there is no money
And such a moment is often of interest to Ukrainians, since large Ukrainian banks are actively expanding the possibilities of lending for the purchase of housing. In solving this issue, there is only one profitable option — lending or installments are appropriate only in the case of a shortage of the minimum amount of the value of the selected new object. That is, at least 70% of the housing price must be available, then there is an opportunity to issue installments, including directly from the developer.
So, should you invest in real estate? The answer is obvious - it is one of the most profitable ways to make a profit. However, choosing the object of purchase should be approached carefully, and in the absence of knowledge and experience, it will be difficult to do without the help of experts. Subscribe to our updates real estate portal and receive the latest publications from the real estate agency THE Capital.
