Greetings! Over the nine months of 2017, investments in Russian real estate grew by 40% and reached $1.74 billion. On the other hand, over the past four years, the popularity of investments in the residential segment has fallen three times (according to CIAN analysts).

What conclusion can be drawn? In Russia, the demand for investment in residential real estate is clearly decreasing and growing - in commercial real estate.

Therefore, today we will talk about investing in commercial real estate: options, pros/cons, risks and pitfalls.

Commercial real estate is any non-residential facility that generates income for the owner (warehouse, office, hairdresser, hotel, gym, business center, supermarket).

Let me tell you about the most common options in more detail.

Marketplaces

In Russia, this is one of the most profitable types of real estate. Shops and shopping centers in a place with high pedestrian traffic generate profits of thousands of rubles per square meter for the owner.

How it works? You find a land plot, build a shopping center there and rent out the sites. You do not even have to "bother" with the improvement of real estate. Bare walls with connected communications are rented out. Repair, furniture and appliances are the problems of the tenant, not the owner.

Experts consider street retail to be the most interesting area of ​​commercial real estate in Moscow. Previously, apartments on the first floors were converted for such objects. Today, the average street retail rental yield is 11-12%. A good store closer to the Moscow Ring Road pays for itself in 9–10 years.

By the way, according to the results of the first half of 2017, $690 million was invested in retail space - the maximum figure over the past five years.

Office sites

They are inferior to commercial real estate in terms of profitability, but also brings considerable profit to the owners. Much more than the income from renting out residential properties in the same area.

Once upon a time, office real estate was considered the most profitable investment. And today, the average profitability in the office segment is 0.5–1% lower than in the retail segment. Demand is growing only for small office space (100-200 m²) and new formats (for example, coworking).

Over the past five years, the introduction of new business facilities to the market has been minimal. That gives hope for the growth of rental rates in the next year or two. So there are prospects in the office real estate segment, but the risks are still high.

Industrial objects

First of all, this group includes warehouses, as well as industrial facilities. In Russia, industrial real estate is not in great demand among investors. Competition in the market is high, there is no shortage of vacant properties yet, and long-term lease agreements are rarely concluded.

The exception is warehouses. They are willingly rented by online stores and large retail chains. Large warehouse complexes with an area of ​​100,000 m² or more are most in demand today.

Commercial real estate investment options

Investment in construction

From the moment construction begins (the first stage of all stages of construction) to the commissioning of the facility, the price of real estate grows by 40-70%. But such investments come with high risks.

• Firstly, the developer may turn out to be a banal fraudster or an honest bankrupt.
• Secondly, construction is sometimes stretched out for an indefinite period. For example, because of the sharp rise in prices for building materials.
• Thirdly, it is not so easy to find buyers or tenants for a finished object. Until the moment of sale (or during periods of downtime), the premises will incur losses.

Well, of course, investment in construction requires serious capital. Moreover, investments in commercial real estate.

Participation in a crowdfunding project

Crowdinvesting is collaborative or "people's" funding. Collective investments provide an opportunity to participate in large-scale projects. Including buying real estate. Crowdinvesting online platforms select promising projects, make their initial assessment and attract everyone to finance.

There are several major sites in Russia: StartTrack, VentureClub.co, City of Money, Potok and, of course, AKTIVO. The AKTIVO project offers new opportunities for passive income from real estate rental through an online service.

How it works? The Aktivo team searches and audits properties for sale. The project is focused on real estate with a yield of 13% (about 2% of all commercial offers on the market). Most often, Aktivo selects street retail for investment.

Any adult Russian with a passport can invest in "square meters". The minimum investment on Aktivo is 100,000 rubles.

For investments, mono-funds are created in the form of a closed mutual fund. The premises for which the funds are collected are entered into the balance of the monofund. In other words, the fund's shares are backed by the asset in advance!

Every month, the site offers investors a new object, divided into shares of 1000 rubles (nominal value). The client presses the "invest" button and after three days his shares are credited to his personal account. All Aktivo facilities are insured by Sberbank Insurance.

As soon as all shares are redeemed, shareholders begin to receive income from renting out the object.

In 2016, more than 200 people became investors on the Aktivo platform. During the year they invested 500 million rubles in commercial real estate. Two objects were exhibited on the site:

• Supermarket "Victoria" in Dolgoprudny (yield 12.1% per annum).
• Supermarket "Pyaterochka" in Lyubertsy (yield 11.2% per annum).

Share in real estate mutual fund

In Russia, investments in real estate through shares are available only in closed-end mutual funds (CPIFs). In fact, this is an ordinary mutual fund, but the money of shareholders is invested in real estate.

Why is the fund "closed"? Because you can enter it only at the beginning, and exit (present the management company with shares for redemption) - after completion. Classic investments of the "buy and hold" format. By the way, it was at the expense of ZPIFN funds that the Atrium shopping center was built.

Due to the fact that REITs are created for specific projects (something like a closed club “for their own”), they are characterized by low liquidity.

Let's analyze the structure of the REIT using the example of the "Commercial Real Estate Fund" from the Management Company "Sberbank Asset Management".

The fund is aimed at long-term investors (the recommended investment period is five years). The purpose of the fund is to purchase real estate and rights to it in order to receive income in the future from renting or reselling at a higher price.

The Fund invests in shared construction for residential projects, commercial real estate and land plots in Moscow and Moscow Region, Kazan and Novosibirsk. Every six months, the investment income is distributed among the shareholders.

Unfortunately, the Commercial Real Estate Fund does not show any growth. So far, the fund's shareholders are only suffering financial losses. Since the beginning of the year, the share price has fallen by 10.61%, and over three years - by 30.56%. Today, one share of the Sberovsk REIT is valued at almost 180 rubles.

Aparthotel room

Apart-hotels allow you to earn money by renting out apartments.

For the owner of such a number, there are two ways to earn money:

• Active investments: renting out an object (daily or monthly);
• Passive investments: conclude an agreement with the management company and receive a percentage of the profits.

Advantages of investing in apart-hotels:

1. Lower purchase price compared to other residential properties (by 10-20%).
2. The object can be bought with a good discount at the construction stage (up to 30% of the price of the object).
3. A room in an apart-hotel brings regular profit without a serious investment of time and effort.

The management company guarantees the investor an income that does not depend on the density of the client flow or the season. The return on investment is usually comparable to the interest on a bank deposit. But unlike a deposit, you have a physical asset on hand.

In Russia, the direction of apart-hotels is only in its infancy. So far, several facilities have been built in Moscow and St. Petersburg. But the segment is promising and is growing at a good pace.

Investments in overseas property

For 10 months of 2017, the number of requests for the purchase of foreign real estate for the purpose of investment has doubled (compared to the same period last year). However, this is still 45% below the pre-crisis level.

In 2016, the TOP-10 countries popular with Russian-speaking investors looked like this: Bulgaria, Italy, Spain, Germany, USA, Greece, Montenegro, Turkey, Czech Republic and France. Approximately 40% of applications concerned commercial real estate.

However, the list of countries with high yields of properties looks quite different: New Zealand (15.1%), Latvia (11.5%), Canada (11%), Israel (9.3%), Hungary and Austria (8. 5%), Sweden (7.9%), Turkey (7.3%), United Kingdom (7%) and Bulgaria (6.7%).

How to choose a foreign object for investment?

Step 1. Decide on the purpose of investments:

• To save capital for a long time, stable markets are suitable, where prices practically do not change (Berlin, Paris, Vienna, London, Oslo, Copenhagen, Stockholm, Budapest). The return on such investments is 4-6% per annum.
• To increase savings, you need to choose markets with good growth potential and affordable prices.

To select objects, it is worth studying independent analytical reviews (for example, Colliers International or Knight Frank). The main thing is not to run into another “bubble”.

The yield on such investments can reach 9% per annum.

Step 2. Assess the attractiveness of investments.

Today, the most profitable investment in European "square meters" is the purchase of an object under construction. It is better to buy either a new property or an object no older than 10 years. In this case, it is usually at the disposal of developers, not agents.

Before the deal, the investor will have to study the volume of tourist flow in the country, the current state of the infrastructure, the demand for the facility, and the price in rubles per 1 m².

Step 3. Do not forget about additional costs.

When buying overseas real estate, be prepared for additional costs: one-time and regular (lawyer, notary and realtor services, financial intermediation, stamp duty, facility repairs, taxes, insurance, management company costs).

Average one-time costs are approximately 7% of the value of the object, regular: 1-1.5% without a mortgage.

A few words about residential real estate

Apartment in a new building

In 2008, it was possible to buy an apartment in a new building and resell it in a couple of months with a yield of 40%. Today, it is extremely difficult to make money on the resale of "primary" properties.

Buying an apartment is not a problem - it is much more difficult to find a buyer who is ready to buy it “with a wrap”. Several years may elapse between the moment of purchase and sale. And all this time the owner of the object bears the cost of maintaining the object. In rare cases, the profitability of transactions reaches 20%.

It is very unlikely that housing prices in Russia will rise in the foreseeable future. This also applies to Moscow, given the grandiose plans of the Moscow mayor's office to bring a huge amount of new housing to the market as part of the renovation.

Apartment for rent

In 2017, experts do not recommend buying residential real estate for rent. Serious costs for the purchase and maintenance of residential apartments "drop" the rental yield below the interest on deposits. The level of income from long-term lease in Russia is approaching the European one: 4-6% per annum. Yes, and in terms of time costs, renting out premises is more like a business than a passive investment.

Therefore, to the question “to take a loan or save”, I usually answer: “only without a mortgage.” The time when earnings on housing covered mortgage rates is already behind us.

Risks and pitfalls

Investments in commercial real estate in Russia are affected by three groups of risks:

• political;
• Economic;
• Legal.

In recent years, Russian geopolitics has been, to put it mildly, inconsistent. We are sharply and unexpectedly changing both development priorities and allies. Such "throwing" makes Russia dangerous from the point of view of international security. Not to mention the notorious sanctions and counter-sanctions.

From the status of "everything is complicated", first of all, business related to tourism, trade and mass events suffers. Including hotel.

The economic situation in Russia is also, unfortunately, not cloudless. And it is unlikely that something will change dramatically in the coming years. After all, the crisis of 2014 (unlike 2008) was caused not by external, but by internal factors. The raw material export model has proved dangerously vulnerable.

Well, legal risks in Russia have always been high. Every year the government seeks new sources of budget replenishment. And this, as a rule, hurts private business. For example, since January 1, 2017, the cadastral valuation of real estate has completely passed under the control of the state. That enriched the officials and created a lot of problems for business owners of real estate.

Pros of investing in real estate

• Compared to investing in residential real estate, the payback period is shorter and the returns are higher.
• At the stage of economic recovery in the country, the demand for commercial real estate is always growing.
• It can bring a truly passive income for many years, if you put the object under management.
• If you invest in the repair and maintenance of the building on time, then over the years the value of the object will only increase.
• On the security of commercial real estate, banks willingly give loans on adequate terms.
• In the event of a stock market crash, commercial real estate prices will not fall immediately, but “belatedly”.

Cons of investing in real estate

• Requires a large start-up capital. Much more than residential real estate.
• Low liquidity of investments. It will not be possible to quickly sell a warehouse or a store.
• It is difficult to predict how property prices and rents will change.
• Commercial real estate reacts more strongly to negative phenomena in the economy (falling consumer demand, devaluation of the national currency, local crises).

Conclusion

Real estate is always a great investment option. Over the years, only trends and directions change, and new formats for investors appear. In 2017, retail real estate, apart-hotels and countries such as New Zealand, Latvia and Canada are in demand.

Investments in construction and mutual funds today are low-yielding. But participation in crowdinvesting projects is more popular than ever.

This way of multiplying your funds, like investing in commercial real estate, has recently become popular not only among professional financiers, but also among private investors. True, not all of them are yet able to properly dispose of the opportunities that the real estate market gives them.

My friend, with whom I sometimes crossed paths in St. Petersburg on the topic of investing, sold several of his investment apartments for rent and bought commercial real estate in new buildings. According to him, it is much more profitable. There are some troubles, of course, but I'll try to understand what kind of niche it is.

How to get income

There are two ways to make money in commercial real estate:

• having received income from the resale of premises at a higher price;
• renting out your premises (investment in rental property).

The entire first floor of our huge house is commercial property. Yesterday I went through on purpose - I looked at what was there: shops, several cafes, two fitness rooms, English training, a point for issuing children's goods and much more. And all this is actively rented, leased and re-leased. But when the house was being built, there was an idea to buy a small room, but did not dare ...

Each of the methods has its own advantages and disadvantages. The most profitable way to invest is to rent out space, which gives a constant high income from rent.

What is worth investing in (types of commercial real estate)

All commercial real estate can be divided into several categories. Commercial properties are:

• office: office buildings, offices, classrooms;
• trade: shopping centers, shops;
• industrial: enterprises, warehouses;
• services: sports facilities, clubs, restaurants, hotels.

When choosing premises for investment, you must proceed from the purpose for which you want to use it.

Office

Liquid office real estate can be of various types:

• An apartment transferred to a non-residential fund or a specially built non-residential premises. The following factors may affect the rental price:
• location area;
• Availability of nearby parking spaces;
• the location of the future office within walking distance from the metro, public transport stops.
• Small detached buildings. This location of the office increases its “status”: the company looks much more “solid” if it occupies an entire building alone, without neighbors.
• Premises in business centers. They have their own advantages. For example, many issues that lie with the owner of the property (parking, utilities, cleaning, repairs, etc.) are resolved by the administration of the business center.

Trading

The most popular commercial real estate is located on the ground floors or in the basement of buildings, both residential and office. It is interesting for owners of small shops, pharmacies, hairdressers or cafes. Even if it is located in a residential area, it is still able to find its tenant - people always need small services near their homes.

Premises in shopping centers are convenient because sometimes it is possible to buy out neighboring areas, increasing their investments. Typically, the price of commercial real estate is several times higher than the cost of office space.

Industrial

Less popular, but by no means less profitable types of real estate. Due to the fact that it is now difficult to produce some goods in Russia in small areas, the most popular types of this property can be warehouses, car services and car washes.

In the service sector

A profitable investment in real estate can be the acquisition of premises for a fitness center or mini-gym. In this case, of course, it is necessary to provide for the availability of appropriate infrastructure - showers and, possibly, a pool. Investments in the construction of a mini-hotel or hostel can also quickly pay off if you choose the right location.

How to choose the right property

Naturally, the real estate market of each particular city has its own characteristics. However, we can highlight the most important aspects that will help you choose objects that can bring large profits.

• Assess the demand for the future object. You can't count on a good income from an office on the outskirts of the city or a warehouse in the center with constant traffic jams. Each object should be located where it will bring the greatest profit.
• Small offices are much more readily rented than large ones. So, by investing in a couple of small premises, it is quite possible that you will get more profit than by acquiring one large one.
• Buy in new buildings. By investing in the early stages of construction, you will save a lot of money.
• Analyze prices in offers. The price for the same type of real estate can vary significantly by city districts.

As a rule, during a crisis, the demand for commercial real estate of the highest price class falls:

What income can you expect

When renting, the profitability of commercial real estate is the ratio of the annual income received from the lease of the object to the cost of its acquisition.

At the same time, the concepts of total profit and net profitability are separated:

• full profit is the rental income without taking into account expenses (costs of maintaining real estate, paying taxes, etc.).
• net income is the funds remaining from the total profit after all expenses have been deducted.

How profitable is the investment

As a private investor, I have always been worried about the question of how does the return on investment in this particular area look like compared to other financial instruments?

The closest market looks residential real estate. However, according to experts, investing in commercial real estate is one and a half to two times more profitable than investing in residential real estate.

If we compare returns bank deposits and investments in commercial real estate, then today investments in it bring more income than bank deposits.

If we consider the return on investment for stock market, then it very much depends on how correctly the tools are chosen. The return of the stock market can be higher only with careful work on a short-term strategy. In the long term, which is designed to work with real estate, you can get only from the "blue chips".

How much can you earn on mini-offices:

The positive aspects of investing money in commercial real estate are:

• protection of savings from financial troubles;
• investment is based on ownership;
• income stability;
• high level of income;
• the ability to independently control their capital.

But you should not forget about the minuses:

Investment risks

• although legal entities are more predictable than private tenants, they may have problems paying rent;
• during a crisis period with mass bankruptcy, the demand for premises falls, rental prices decrease, and it is more difficult to rent premises;
• incorrectly estimated operating costs can dramatically reduce the return on investment;
• the possibility of various encumbrances when investing in the secondary market;
• the possibility on the part of the city authorities to terminate the lease on the land on which the property is located.

taxes

Commercial property rental income tax is calculated like any other personal income tax in Russia at a rate of 13%. But you, as the owner of real estate, must also pay property tax. Its size depends on the cadastral value of the objects you own. The interest rate changes in steps:

• 0.1% for value less than 10 million rubles;
• 0.15% for the cost of 10-20 million rubles;
• 0.2% for the cost of 20-50 million rubles;
• 0.3% for the cost of 50-300 million rubles;
• 2% for the value of more than 300 million rubles.

In this case, no tax deductions are provided.

Until April 1, you calculate and pay taxes, submit a tax return - and until next year, "sleep well."

And what will Gerchik say about the opportunity to invest in commercial real estate:

Considering all the features of investing in commercial real estate, after analyzing all the risks and benefits, you can independently decide on the choice of an object for investing your funds.

Successful investment and stable profit!

Today, investors are increasingly questioning the feasibility of investing in residential real estate. Low income from renting to tenants and the absence of serious prerequisites for rising housing prices contribute to the fact that investment in commercial real estate is becoming more relevant.

Features of the commercial real estate market

Just like residential real estate, commercial properties can generate income as a result of speculative transactions (buying and selling), or in the form of rent.

However, the fact that commercial property is for business affects the number of potential tenants and their nature. There are about 4-5 times fewer people interested in commercial real estate than those who need housing. This is natural: entrepreneurs, and especially medium and large ones, represent a relatively small stratum of society.

In addition, the commercial real estate market is more sensitive to negative factors than the housing stock. This is due to the fact that business activity is experiencing ups and downs. During periods of decline, the demand for warehouses, offices and other facilities drops sharply, and along with this, the price also goes down. Having a narrow focus, investments in commercial properties have good prospects only under favorable conditions.

Yield level

In pre-crisis times, the benefits of investing in office, warehouse and similar buildings were obvious. There were years when real estate prices doubled, and even a small property could bring its owner a solid income. At present, income can not always be obtained, so investment should be carried out only after carefully calculating all the details.

Subject to the developed investment strategy, the investor can receive significantly more income from a commercial building than from a residential one. This is due to the fact that the rent for a commercial facility can be 1.5 - 2.5 times higher than the rent for residential real estate with the same initial cost of the objects. Renting commercial real estate is attractive because it is possible to conclude a long-term contract at a high price. This is an ideal choice for those who wish to receive passive income. Housing is rented expensively only for daily rent, which is associated with numerous troubles.

The amount of income from real estate transactions is measured by the "cap ratio", which is defined as the ratio of net income for the year to the initial investment amount. For residential properties, an indicator from 3 to 7% is considered normal, for commercial objects - from 8 to 12%.

Objects attractive for investment

Most often, investors prefer warehouses, office and retail premises, as well as hotels. To understand what type of real estate will be the most profitable in a particular city or area, you need to:

1. analyze the supply, demand and infrastructure of the local market;
2. based on the collected data, calculate the profitability and payback periods of various types of objects;
3. collect the results in a table and choose the most attractive options.

As a rule, the cost of offices and trading floors pays off most quickly: this requires from 5 to 10 years. Warehouses and hotel-type premises require more time: from 7 to 11 years.

The greatest risk for investors is associated with investments in commercial buildings that are under construction. The construction of an object can be frozen or completely stopped for reasons that cannot always be predicted. Especially often such situations arise in crisis and post-crisis times. To be safe, you should give preference to those objects that are presented on the secondary market.

Modern tendencies

Demand for commercial real estate in 2014 has undergone significant changes. Investments more than halved, primarily due to the outflow of foreign investors. Analysts attribute this to the aggravated political situation, the possible entry into force of sanctions against the Russian Federation, as well as the slowdown in the economic growth of the Russian economy.

However, large cities remain attractive no matter what. Demand for real estate in Moscow and St. Petersburg not only did not decrease, but also showed a slight increase. The most attractive now are hotel and office buildings.

Experts are confident that the situation will normalize as early as next year. The crisis that has arisen gives Russian investors some advantages: taking advantage of the falling market, you can buy real estate at a low price and receive high speculative income in the future.

Conclusion

Investing in commercial properties is more profitable in the long run than investing in housing stock. However, the specifics of the market requires a more thorough approach to its analysis. In addition, there is some barrier for small investors due to the higher average cost of commercial properties.

The unstable economic situation in the country encourages Russians to hastily look for a profitable use of their savings. One of the most common investment options is buying an apartment. Meanwhile, you can invest money not only in residential real estate, but also in commercial. With a competent approach, retail and office space pays off faster than standard apartments and brings the owner a stable income even in times of crisis.

Buying commercial real estate - the price of the issue

The most affordable options for office space are found on the territory of New Moscow (for example, non-residential premises with an area of ​​18 sq. m in the basement of a new residential building in the city of Troitsk on Zarechnaya Street are offered for 990 thousand rubles) and the Moscow region. According to Alexander Bolotov, CEO of MIEL-Commercial Real Estate, outside the capital, with a budget of up to 2 million rubles, you can purchase a separate office building.

However, before investing money, you need to weigh all the pros and cons and clearly imagine the circle of potential tenants. Such objects can not always boast of high competitiveness, especially in today's economic environment. The exception is small premises in the city center, which are willingly rented by notaries, law firms, and travel companies.

Another option for investing in commercial real estate is the purchase of a warehouse. However, there are several nuances here: it is not so easy to rent a separate room, it will need its own security, connection to communications, additional equipment. And it is difficult for a private investor to compete with large warehouse complexes. Therefore, if you manage to purchase a suitable room at a reasonable price, you can convert it into a service, tire fitting or car wash, and only then look for a tenant.

If you decide to conduct a small survey among your friends, acquaintances and relatives who do not have knowledge and experience in investing, asking them the question: “ What is the best way to invest money in your opinion?”, then, most likely, 90% of them will answer:“ Real estate».

Investing in real estate is so popular with people because of its simplicity and reliability. They see living examples of making a profit around them: someone sold an apartment that they inherited, someone converted an apartment on the ground floor into commercial real estate and rents it out for offices.

But this is the opinion of people who are not versed in investing. Now let's look at this way of investing money from the point of view of an experienced investor.

Earnings on real estate: rent or sale?

There are only 2 types of earnings in real estate:

• Sale. Speculative income: bought low, sold high.
• Rent. Renting an object for long-term or short-term rent.

Speculative income in real estate.

There is an opinion that real estate prices are always growing, so if you buy an object now, then after a while it will be possible to sell it for more. But in fact, the price will not necessarily go up.

Dynamics of the price per square meter of residential real estate in Moscow in rubles.

The graph shows that over the past few years, the price of one square meter in Moscow in rubles has increased slightly. And if you look at the statistics in dollars, we will see that it has fallen in price a lot. And this means that those who invested in Russian real estate in foreign currency will record a loss by 2016.

Dynamics of the price per square meter of residential real estate in Moscow in dollars.

In general, there is a type of real estate that depreciates the least - this is economy class housing. Demand for such objects is always high, even in times of crisis, when luxury real estate becomes cheaper.

Therefore, investors prefer to buy objects below the market value, and then sell them as quickly as possible at the market price.

Investment in real estate and income from rent.

This way of earning on real estate objects is very popular. People buy apartments or offices, rent them out and receive passive income.

But, in fact, it is not as profitable as they think. For example, the average return on a long-term investment in residential real estate is between 6% and 10% per year.

Therefore, people investing in residential real estate are trying to increase the yield up to 30-40% per year, using the following methods: they choose the location of the property wisely, buy property cheaper than the market, and use hacks that help increase income from one property.

For example, real estate prices in Moscow and St. Petersburg are so high that with a long-term lease of the purchased object, you can get about 6% per annum. But as soon as you go to the region, the ratio “price of the object / cost of rent” becomes more profitable for the investor. It is already possible to earn up to 10% per annum from an object in the region.

We will discuss other methods below.

How to buy cheap? Profitable investment in real estate.

• Without repair.

Objects without repair, or repairs that have not been done since the time of Brezhnev, are cheaper. It turns out that, for example, it is more profitable to take a “bare” apartment and make “investor's” repairs in it than to buy an apartment with repairs.

The apartment is not renovated.

Many people prefer to do repairs at such facilities on their own, thus saving even more money.

• New buildings.

You can buy an object in a house under construction at a price 30% below the market price. Such objects can be either sold after commissioning, making a profit of up to 1/3 of the initial investment, or rented out.

An apartment building under construction.

• Unfinished.

I think, moving around your city, you often see objects whose construction is frozen. The reasons may be different: money ran out, more profitable projects appeared, disagreements appeared among the owners, etc.

Unfinished property.

Often such hung objects are dead weight for owners who would not mind selling them, even at a very low price. Therefore, such a property can be bought and completed independently.

• Confiscated and mortgaged real estate.

Often banks confiscate debtors' assets and then sell them at a reduced price. Such assets are not only cars and other equipment, but also real estate.

Since the bank needs to sell the object as soon as possible in order to recover the funds spent on an unscrupulous borrower, the price is set below the market price. Anyone can buy this property.

5 hacks when investing in real estate.

• Divide and rule.

One of the most common recent strategies for increasing profitability is to break one object into smaller ones and rent each of them separately. So it turns out much more profitable.

For example, often one one-room apartment is turned into two studios, which increases income by 50-70%. It turns out that entering the door from the entrance, a person enters the vestibule, in which there are doors to two studios.

This method is becoming very common, so companies are created that specialize in such redevelopment. They help to create several bathrooms and do redevelopment.

Studio apartment.

By the same principle, cottages and townhouses are divided into studios. After the transformation, they begin to look like hostels or guest houses. This format is very popular among tenants, because it allows you to save on housing.

The same can be done with commercial real estate. Often, property owners split a large space into several small offices. As a result, it turns out that renting several small offices is more profitable than one large one.

But this method also has a disadvantage, which is that you have to look for more tenants.

• Additions and extensions.

People who professionally invest in real estate understand that every square meter must be used. And with the help of extensions and extensions, you can increase the footage of the object.

Extension in a residential building.

You can often see how apartment owners combine a room with a balcony or break partitions between the room and the kitchen, thus obtaining additional square meters.

• Sublease.

There are several strategies for making money on non-real estate that is not yours. You can take residential property for a long-term lease, and rent it out for shorter periods. For example, rent an apartment for a long time, and rent it out by the day. With a good load, you can recoup the rent and make a profit.

The same principle applies to commercial real estate. For example, you can rent an office for a long time and rent it out in the “office for an hour” format.

• From residential to non-residential and vice versa.

It often happens that some objects are not profitable to rent for their intended purpose. Therefore, they are transferred from residential to non-residential and vice versa.

For example, it is sometimes more profitable to convert an apartment on the first floor in a disadvantaged area into non-residential premises and rent it out to entrepreneurs as an office.

A common case of transferring a non-residential property to a residential property is the creation of hostels and hotels from various types of commercial properties.

• Construction from scratch.

Instead of buying an already built object, you can invest money in the construction of real estate. Houses using Canadian technology with the help of SIP panels are built quickly and inexpensively.

Construction of houses and SIP panels.

Therefore, you can buy or take a long-term lease of land, build an object on it and sell it or rent it out.

Where to get money to buy real estate?

Since all construction and investment in real estate is mainly carried out on borrowed funds, an unusual picture emerges for the average person. It turns out that those who have the most debts earn the most in this area.

Just remember Donald Trump, who, being one of the richest people in the world, had billions of dollars in debt to creditors.

• Credit.

One way to get money is to go to the bank. To buy an apartment, you can take a mortgage loan at 15-20% per annum. It turns out that in order to purchase a residential property, you will need to collect only 10-20% of its value. For example, if an apartment in a new building costs 1,000,000 rubles, then you will need to find about 150,000 rubles, which is a relatively small amount.

• Loan

Borrowing money from friends, acquaintances or relatives to buy real estate is easier than for most other needs. Because they understand that this is one of the safest ways to invest money.

• Investors.

There are many people around who have savings, but who do not know where to invest them. Invite them to invest in real estate. You can invest some of your money, earning a proportionate return, or charge a percentage of the investor's asset management.

• Co-investment.

If you do not have enough money, and you do not want to get into debt, then you can find investment partners. Thus, by gathering more people, you will need to invest a smaller amount. Of course, the income will also be low, but the risks are minimal.

I also see attempts to create investment platforms for investing in real estate. Here is one of these sites: Rusinvestproject.ru. This direction of investment is widespread in the West, and, I hope, will soon come to us.

Investments in commercial real estate.

Commercial real estate includes office, warehouse, retail space, etc.

This type of investment is hardly suitable for beginners because of the complexity. Indeed, when renting out objects, you will need to register a legal entity, conclude agreements with tenants, keep accounting records and report to the tax office.

If you still decide to choose commercial real estate, then remember that, firstly, it is less liquid than residential, and, secondly, it is always easier to find tenants in small premises than in large ones.

Investments in residential real estate.

This type includes apartments, cottages, townhouses, guest houses, country houses, hostels, etc. This is one of the most common ways to invest.

Several high yield options:

• Rent an apartment for rent.
• To break an apartment into a studio and rent it out for a long time. Such housing is popular with young people and students.
• Rent a country house or cottage for lovers of secluded relaxation.
• Rent out a guest house. To break a townhouse into a studio and populate people of the same age group there.
• Build and rent a bungalow in the resort area for vacationers.

Investments in overseas property.

Of course, due to the depreciation of the national currency and the deterioration of living standards, investors want to receive money in more stable currencies. Therefore, many of them are looking towards buying overseas property.

In most of the countries in which the purchase of objects is considered, income levels are higher than in the countries of the former CIS, and real estate prices are not so high. Therefore, the ratio "price of the object / cost of rent" is more beneficial for making money on real estate.

The most common countries for buying property are Iskania, Bulgaria, France, Germany, Greece, Portugal.

real estate mutual funds.

One way to invest in real estate is to invest in real estate mutual funds. These are closed Mutual investment funds that specialize in real estate.

In fact, this type of investment is low-yielding. In addition, when buying shares, you will not be able to withdraw money until the end of the investment period. Usually it is about 5 years.

Thus, this type of investment, although highly reliable, is long-term and low-yielding.

Real estate investment risks.

Although this type of investment is considered one of the most reliable, the investor still needs to know what risks he can expect.

In each individual case, the investor may stumble upon different pitfalls. For example, when buying real estate in a new building, construction may be frozen or the object may not be delivered on time. In addition, during construction, the price of real estate in this area may fall (for example, the cancellation of the construction of a metro station, or the opening of production nearby, etc.).

Therefore, one cannot believe the popular rumor that real estate prices always only grow. As the last crisis showed, prices can also fall.