For a long time, real estate has been one of the most reliable ways to preserve finances. A similar guarantee cannot be expected from money, nor from gold, nor from precious stones. Jewelry and precious metals belong to movable property and can be quite easily lost, while cash is subject to inflation and is affected by monetary reforms. Housing is always in the price. And it can even serve as a tool for profit. If you know how to make money on real estate, you can establish a very real and reliable business. Let's briefly review its main schemes.
How it works
So, we earn on the sale of real estate. And not only on it. Investing in residential facilities can be on a different scale and by various methods. Namely, buying and reselling apartments, renting out premises or opening your own intermediary business in the form of a private real estate agency. You can buy or rent commercial premises. Other real estate (cottages) as an object of resale is quoted less due to the high cost of a unit of housing, but also quite in demand.
Not each of these methods is available to anyone. Buying housing or renting a commercial fund requires an investment of very, very considerable initial funds. Mostly commercial organizations can afford such investments. Among their opportunities is obtaining a bank loan for their own project. But a real estate business, that is, earning from transactions with its purchase and sale, is also available to an individual with the necessary initial capital.
What are the main risks
The main risk of business in this area is the lack of quick payback and possible losses in this regard. The most popular form of such investments is the purchase of housing (a separate apartment) for the purpose of further sale. In recent years, due to the crisis and falling prices in this area, the volume of investments in such transactions has decreased markedly and amounts to no more than 15%. This is explained by the lack of increased demand as opposed to the housing boom of the beginning of the 2000s.
Buying a home in conditions of growing demand for it guarantees multiple earnings during its resale. This is especially true for those who managed to invest in this area free finance in the last decades of the last century. After 10-15 years, the profit in such transactions amounted to ten times the size.
Nowadays, such an effect can no longer be expected, since periods of especially rapid growth in demand for housing (and, accordingly, prices) are not expected in the near future. At present, the domestic market is rather in a phase of decline. Significantly increase in price only affordable housing. In large cities, including the capital, expensive real estate is not in rush demand.
About shared construction
The best option for investment is housing in new buildings. Other real estate ("secondary housing") will not give such an effect. The cheapest will cost a purchase in the house at the stage of excavation. By purchasing an apartment in the initial phase of construction, you save about 30% of its cost. In a stable market, this is exactly the profit figure, the calculation of which investors can be considered quite real.
But one should not discount the huge mass of risks of the shared construction system. At the earliest stage, their value is maximum. To reduce risks, only developers with sufficient experience and a solid reputation should be chosen. Indirect, but not absolute signs of this can serve as a lot of previously commissioned objects, conducting activities in accordance with the provisions of the Federal Law No. 214 "On Equity", a system of credit relations with one of the state banks, which, as you know, choose partners carefully and carefully.
What apartments to buy
How to make money on real estate, having the necessary amount for investment? Which apartment is better to buy? If you plan on its further sale, choose a monolithic house. This will increase the future market value of the property. The price also depends on the degree of improvement of the surrounding territory, the quality of infrastructure, the availability of nearby necessary social facilities in the form of a school, kindergarten, hospital and chain of stores, good transport interchange, and in Moscow, proximity to the metro and the general rating indicator of the district.
Conducting their business in the capital, it is recommended to focus on plans for the construction and expansion of the subway network. In Moscow today, interest in real estate located outside the Moscow Ring Road has increased. The reasons are the increase in prices for such apartments when connecting to the former remote area of the metro line. The cost of housing increases in such cases by 15-30%.
What you should know about real estate in the suburbs
Housing prices are rising not only in Moscow, but also in the region. The cheapest real estate in the suburbs is apartments in new buildings in Zelenograd. This is due to the remoteness of the city from the Moscow Ring Road. Moreover, the infrastructure in this area has no worse than Moscow. In addition, you should pay attention to the areas of Solntsevo, where this year it is planned to open a metro line, Yuzhnoye Butovo, Dmitrovsky, etc.
Another option for investing in real estate is renting it out. How to make money on rental real estate? Removable housing is almost always in demand. After all, not everyone can afford to buy their own apartment. A person planning this option needs either a free real estate object (apartment) or a certain amount in the form of initial capital.
You can use this money by renting a suitable housing for the parameters with a view to subsequent surrender. If there is enough money to buy an apartment, which you can later rent out, consider that your business will inevitably succeed.
The result is not coming soon ...
But it should be borne in mind that the purposeful purchase of an apartment for future rent is not the fastest business. Its payback is not so great. In Moscow, buying an average one-room apartment at the price will pay off in about fifteen years, for a two-room apartment this period is sixteen to eighteen years, and the cost of a three-ruble note is that you can return all the money invested in the purchase only after a quarter of a century.
How to make money on real estate using a mortgage? And is this possible? Contrary to the prevailing scheme with the purchase of an apartment on a mortgage and subsequent lease, the payback of such housing does not stand up to criticism. This property requires a very long repayment of loan amounts with interest. The procedure drags on for decades. The total cost of housing as a result is sometimes overstated by a couple of times. Renting such an apartment does not bring any tangible profit, the maximum covers the payment of a loan.
What apartments rent
So, you have decided to buy an apartment for rent. Which is better to choose? The most popular are one-room. They are most often chosen for rental. The requirements for the house in this case are not too high. It can be panel, and not too prestigious. If you do not allow the thought of the future sale of such an apartment or use it for your own needs, budget housing in a five-story panel building is a good option in the sense of saving initial investments. But, bearing in mind the possible prospect of a sale, one should take care of its acceptable quality.
Most often, the final prospect of such an apartment is to become the future habitat of the younger generation of the investor's family. In this sense, investing in housing is a smart and promising step. By the time a child comes of age, the apartment will pay for itself and will increase in price many times over. By renting a housing that is not yet in demand, you will return the initial investment and you will be able to give your son or daughter an adult a great valuable gift almost for free.
If there is no money
Is it possible to do business in real estate without investing a penny of seed capital? You have to disappoint you - this idea is among the unrealistic tales for lovers of freebies. Even when deciding to rent your own apartment, think about the need to bring it in fair condition. That is, the cost of a good redecoration is required.
Investments will require the search for suitable options, and the payment of partially or fully housing and communal services for the acquired objects, and much more. Therefore, without initial funds in this business there is nothing to do.
Moscow real estate - a bonanza?
The capital, with its sky-high housing prices, is the most promising place in terms of such earnings for its indigenous people. The most common option for investing in real estate of an ordinary Muscovite is to rent your own apartment in a good area for very decent money with relocation to live in rented housing in one of the cities of the Moscow Region, where the rental price is several times lower.
Some decide to sell expensive Moscow real estate and buy cheaper in the suburbs. The difference in money is invested in renting additional premises for the purpose of commercial hiring. The metropolitan apartment, in addition, can be converted into a hostel and rent by the day. As you know, retail rental prices are not comparable to long-term rents.
Other options
How to make money on real estate, when there is no extra housing at your disposal and is not expected? If at the same time you live in a "kopeck piece" or "three rubles", and one room remains unoccupied, this free living space can be leased out.
Some of the “apartment” businessmen purposefully buy up apartments, choosing the most “killed” ones - without any repairs, often in a terrible state. As a rule - the former property of alcoholics and other lumpen. The market value of such housing is slightly lower than average, and, having forked out for a decent repair, it is possible to return the invested funds with a significant "addition" with a subsequent sale. After all, the internal state of the apartment is the first thing that a potential buyer will pay attention to. Many purposefully seek housing for repair, as there is no strength or desire to mess around on their own, and are willing to pay for it.
There is such a profession
How to make money on real estate from scratch? Which investment method is the most low-cost? Perhaps here we can talk about private real estate. The intermediary in apartment transactions does not require initial capital, because the principle of such earnings is to receive from the client a percentage of the commission for the services rendered. But this business can not be classified as easy and uncomplicated. Those who choose real estate activities will have to study a huge amount of information, actively move around the city, communicate with a huge number of potential customers, the search for which is more difficult for a single businessman than a professional hyped agency with ample self-promotion opportunities.
In addition to dexterity and penetrative abilities, a realtor is required to have good communication skills and psychological instinct. The first results can be expected no earlier than in a year. And therefore, at first, it makes sense to conduct such activities only on the basis of additional earnings - as an initial step in the development of future business.