Tuesday, April 3, 2018

8 ways to receive passive income on realty investments


Experts of the analytical center "Indicators of the real estate market" have estimated the most accessible and widespread ways of investing in real estate in terms of their profitability and riskiness.



1. Rent a room 

As real estate is now - the acquisition is not cheap, it is not everyone who can invest in it. Hence the best option - to buy not a whole apartment, but part of it, that is, a room. In the capital, such a purchase will cost about 50 thousand dollars. With average rental prices, this money will return to you in 5-10 years, that is, the income will be 10-20% per annum. This is much higher than the yield from the delivery of the whole apartment (about 5% per year), and the price is much higher - 160-200 thousand dollars. 


2. Buy land

 The price here is lower by an order of magnitude - from 2 thousand dollars per plot. However, this is quite risky and, in the long term, a costly investment path. Suitable land is difficult to find and privatize, and it does not guarantee a permanent profit. However, there is a chance that in the near future plots around the cities will rise significantly in price (by 15-20%) due to the development of cottage construction. Yes, and spend money on maintaining the land - to maintain in proper condition, like an apartment, repair and pay for housing services, for example - do not.

3. Become a shareholder. 

A few years ago, buying an apartment still at the construction stage of the house allowed you to save up to 30% of its price. Now the situation has changed - developers are trying to sell their goods at the same cost at all stages of its development, that is, it is impossible to save interest holders. However, analysts believe that in the difficult situation in which the builders put the crisis, developers will begin to provide significant discounts on "secondary housing" - up to 15%. Accordingly, when your apartment is completed and finished, you can sell it more expensive than you bought it. 

 ATTENTION! We have heard all about the stories of defrauded co-investors. Therefore, even without analysts it is not difficult to understand that investing money in a "secondary housing" is a risky business. 


4. Buy a housing certificate

A housing certificate is a piece of paper that certifies your property for a certain living space in a newly built house, and this area can reach up to square meter. When the house is completed, you can exchange a certificate for either the appropriate amount of money (the price will grow by the end of the construction) or to the apartment - naturally, with a surcharge already at a new price. Like shared construction, this method allows you to save on the difference in the cost of "secondary housing" and "primary". 
ATTENTION! If you are not going to resell the area purchased by the certificate, but want to settle on it, this method is even more risky than shared construction. Because it's far from the fact that there is an apartment in the house that matches your certificates. In addition, construction is a long process, and in the short term, real estate prices in Russia can seriously fall. So at best you can sell the certificate for what you bought. On the other hand, inflation will not eat up your money.


5. Invest in closed real estate mutual funds

This tool is quite new for several countries. It allows you to invest almost any amount and receive dividends from it. The management scheme for the shareholder is absolutely transparent and the yield is up to 100% per annum. However, in the current crisis conditions this figure can be much lower, and the return on investment is not small - 3 years minimum. Because you can not withdraw your money from the mutual fund before this date. 


6. Invest in foreign mutual funds 

REIT (Real Estate Investment Trust) - the so-called analogue of our closed real estate investment funds abroad. All the funds invested in REIT are allowed into real estate of different countries, which makes it possible to compensate for possible losses in one market by profit on the other. Profitability in comparison with domestic Mutual Funds is not very high, but for foreign significant - 5-7% per annum. The minimum amount of investment in the mutual fund is 1-3 thousand dollars. 

ATTENTION! This method of investing analysts consider the most profitable - taking into account the very low risk and high enough profitability. 


7. Buy an apartment abroad

Recently, the media is full of news that Russian millionaires are buying villas in Spain, then in London, or somewhere far away. What is not surprising: millionaires people are mostly not stupid and know that in Europe real estate is much cheaper than in the same Moscow. Focusing on the powerful, people think that by selling a medium-sized two-room apartment in the capital, you can buy a house in Spain and live in clover for the remaining money.
But in reality everything is not so simple. Firstly, the preparation of documents for the purchase of square meters abroad is a long and complicated procedure. Secondly, many European real estate markets are now falling and are unlikely to rise in the coming years. So it is profitable to resell (and even sell) your purchase is unlikely to succeed. Thirdly, the lower threshold of investment is high - from 100 thousand to 300 thousand


8. Buy land abroad  

It's much cheaper. The lower limit of investment is 15 thousand dollars. Yes, and more profitable - resell the site after it will be something to build, you can 20-25% more expensive. But now it is too risky: the demand for real estate, and therefore for land, in Europe and the US is rather small.


See also:

8 ways to receive passive income on realty investments


Experts of the analytical center "Indicators of the real estate market" have estimated the most accessible and widespread ways of investing in real estate in terms of their profitability and riskiness.

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