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In the recent years, the interest to investment in real estate has increased significantly. This is due to the developing economy, the rising prices of the real estate properties and the better conditions the banks offer for mortgaging credits.
Those, who have decided to invest in a real estate property, should consider undertaking this step reasonably and carefully to avoid the bitter experience of 2008 – 2009. As with any other investment, there are several basic issues the buyer should bear in mind.
The first decision to be taken is the type of property, in which to invest – apartment in the city, vacation property in a resort settlement, office, store, etc. The people, who undertake this step, usually choose the purchase of an apartment with the idea to rent it. In this case, a furnished apartment may be purchased, which has already been rented out, or an investment in a property in a new building can be made. The second variant allows finishing and furnishing the apartment in such a way, as to rent it at a higher price later on.
When buying an office or business premises such as store, establishment, show room, etc., more money are usually invested because the prices per square meter are higher in this case.
Usually the investment in vacation properties requires a longer period of time to get satisfactorily return on the investment. The issues for consideration in this instance are the season of the year when the property can be rented out, the average prices in the residential complex, whether the rent is short- or long-term, what will be the expenses for maintenance and refreshing among the tenants, etc.
The good investment depends on the detailed investigation of the real estate property market by the time of purchase and the prognoses for its future development. This guarantees to a higher degree an optimal decision taking according to the possibilities of the buyer and the end purpose of the purchase.
By making an investment in real estate property, it is most appropriate to do this at the time of the actual construction process because the prices are lower than that of the end-product. Important considerations in such a purchase are the characteristics of the product itself, the location, the construction company and the investor. The better variant is the buyer to choose a stable construction company with a long history and experience.
The return on investment can be calculated as follows:
- In resale, the ratio is calculated by subtracting the incidental expenses from the expenses generated as a result from the investment, and then the difference is divided by the initial invested sum.
- When renting out, the calculation is based on the annual rate of return of the investment. For example, if you purchase a property for 100 000 EU, and the expected income from renting it out is 500 EU per month, the annual rate of return of your investment will be 6 %.
Here you can have a look at your offers for new building properties that would to a maximum degree satisfy all requirements when purchasing a property for living or for investment.