Investing In Real Estate: How To Invest Money Profitably
The fall of the ruble and the inability to invest in foreign currency made many think about where to invest their savings. Real estate remains one of the safest instruments in this regard.
Residential and commercial properties are still in demand and are able to bring good profits. We tell you what is needed for this, how and in what real estate to invest.
Purpose of investing in real estate
Investing is investing money to make a profit. Invest in real estate to:
Get passive income. To do this, they use their own free real estate, buy a new one for cash or take a mortgage. Then they find tenants and make a monthly profit.
Save savings. To prevent money from depreciating due to inflation, it is often invested in real estate. They buy commercial, residential, budget and elite premises. The ones that don’t go down in price. It is better to buy commercial properties in places with high traffic, and residential properties in areas with developing infrastructure.
Get income from resale or exchange with a markup.
Pros and cons of investing in real estate
Stability. Residential and commercial premises with the right selection are in demand.
Passive income. To make a profit from the purchased apartment, you do not need a lot of effort.
Minimal risks. Even in a crisis, real estate can really be sold or rented out.
Price increase. Real estate is not affected by inflation, just like gold. The cost is only increasing.
Multivariate investment. There are different options for how to make a profit: rent by the day or for a long time, resell, divide into small segments and others.
High price. You need a lot of money to buy real estate.
Long payback. Real estate will start to generate income above the cost in 5-10 years.
Additional expenses. This includes utilities, major repairs and a tax of 13% of the transaction amount.
Is it profitable to invest in real estate in 2022?
Investing in real estate in Russia is a simple and reliable way to save money. But treat this investment responsibly to avoid unnecessary expenses and losses. For example, the spontaneous purchase of an apartment without renting it out turns from a potentially profitable investment into a liability that requires money for maintenance.
Is it worth investing in real estate in 2022? According to Domclick analytics , the growth in apartment prices is gradually slowing down. The greatest profit is received from the purchase of new buildings.
To earn a return on investment, analyze market prices, promising areas and buyer needs. This knowledge will help you acquire undervalued, sought-after and inexpensive properties.
What kind of real estate can you invest in?
The larger the city, the higher the demand for residential and commercial space. Consider investment options.
Residential Properties. The most common type of real estate. How to invest in real estate tokenization, Mostly novice investors work with him, since the risks are minimal. This type of investment is often used to save money. Income is obtained through resale or rental. When buying a dwelling, consider all the characteristics: location, year of construction, layout, infrastructure.
Commercial real estate. Suitable for investors with experience – it is easier for them to choose the right premises. Commercial real estate is more profitable to rent than to resell.
Land. It is profitable to buy land plots, as they are cheaper than other types of real estate. They are quick and easy to arrange. There are no additional costs in the form of utility bills and repairs. When buying, consider the purpose. The most liquid are plots for construction. Agricultural land is suitable for long-term investment.
Country estate. Country houses as a type of investment are especially popular among residents of megacities. Stable demand will be for comfortable houses with a beautiful view and nature around.
New buildings at the excavation stage . Builders set minimum prices in order to “rock” demand and draw the attention of buyers to the object at the initial stage of construction. Buyers of apartments at this stage will have to wait longer than others, and the developer compensates for this inconvenience with the help of the price factor.
Investment in parking spaces . Situational type of investment in large cities. Income depends on the location of the site. Parking is located in a busy place where there are not enough free places for cars.
How risky is investing in real estate?
Investing always comes with risks, and real estate is no exception. Let’s look at the sources of risk.
Bad location . The investor expects that the area he has chosen will be built up, and prices will rise. If this does not happen, there is no demand for the object, and the owner does not receive a profit.
Force majeure . If the environmental situation around the facility deteriorates sharply, this will lead to a drop in demand and value.
Dishonest tenants . Sometimes employers delay monthly payments or damage furniture. For repairs after such tenants need a round sum.
Depreciation . Over time, the value of objects decreases in value. For example, if a new building grows next to a once promising house, the apartments in it will be higher in price and more attractive to tenants.
Freeze construction . To avoid the risk of investing in housing under construction and getting it much later than the promised time, choose accredited developers .
Fraud . In the real estate sector, there are a lot of fraud schemes: one-day firms, the sale of someone else’s property using fake documents, and others. Legal verification of real estate will help secure the transaction .
Ways to invest in real estate
There are two main ways to generate income from real estate: letting and reselling at a premium. Consider their pros and cons.