Councils of experts: how to choose object for investments of
of Investment into real estate the people traditionally consider reliable. When on share the market everything is unsteady, and banks any minute can meet new difficulties, the real estate seems to much silent “harbor“: that - that, and the housing will be necessary for all and always, the bankrupt the apartment cannot become and evaporate in one day too and even if the prices will fall, then then all the same will grow. However and on real estate it is possible to lose many means if it is wrong to choose object.
How not to make mistakes at the choice of object of investments, is told by Metrinfo magazine. Ru, certainly, by means of leading experts on foreign real estate.
we Study the country, the city, the market
First of all, it is necessary to choose the country and the city for investment, there is a potential for an increase in prices and the developed market of rent not everywhere. However, if the real estate is necessary as well for own accommodation, the list of the countries is usually narrowed.
For a right choice should study a set of statistical data. “Appeal of real estate depends on investment risk and investment potential of the region which is defined by the volume and growth rates of GDP (GNP) and direct foreign investments, structure of economy, political stability, lack of global threats, and also a territory saturation of production factors (resource - raw, labor, financial), the size and dynamics of a consumer demand of the population, unemployment rate etc.“ - Andreas Huludis, the chief representative in Russia says the Pafilia Property Developers Ltd companies.
Studying the country, Stanislav Zingel, the president of the International real estate agency Gordon Rock, advises especially to pay attention to such indicators as:
- forecast of GDP growth; it is better to put in those countries where its growth is expected (for example, today GDP growth is predicted in Turkey - on average for 6,7% a year);
- the forecast of a tourist stream and quantity it is low - the budgetary flights to the country; the bigger inflow of tourists is expected to the country, the easier it will be possible to lease real estate (for example, now Montenegro, Turkey, the United Arab Emirates, Thailand, Cyprus etc. stake on development of tourism)
A Kirill Dolginsky, the managing director of the Lowell Finance company suggests to estimate migration flows (than migration level is higher, especially the market of rent) and possibilities of crediting is developed (conditions and rates on the credits, existence of special credit programs, for example, for the scheme leaseback), and also to understand as far as the state protects the rights of foreign investors.according to Anastasia Duderova, the head of department of foreign real estate of the Delta estate company, political stability, quality of life, level of the provided services, safety and an opportunity to do own business are important
.“ And one of the most widespread international ratings over the countries - annual Country Brand Index“, - the expert says.by
Having chosen the country, it is necessary to stop on the concrete city or the region for what as Kirill Dolginsky (Lowell Finance) advises, it is worth estimating prospects of its development, infrastructure level, etc. Appeal of the region can grow with construction golf - club, port, and the district of the city - with development of public transport, roads and construction of facilities of social infrastructure (schools, policlinics, shops, entertainment centers, etc.) .
In parallel with studying of the countries needs to estimate and directly the market of real estate. For this purpose Stanislav Zingel (Gordon Rock), advises, first of all, to study the following:
- Indicators of average annual growth of cost of real estate in this country / region in recent years and the forecast for medium-term prospect (price indexes), both on all market of real estate, and on segments. Than they are higher, the income from investments will be that more, but too big growth in recent years (over 15 - 20% a year) has to guard: it can demonstrate inflating of “a soap bubble“. This phenomenon well is familiar to all on the markets of Spain and the United Arab Emirates. And today, by the way, according to Igor Indriksons, the director of the department of investments into foreign real estate of the IntermarkSavills company, such bubble, perhaps, was inflated in China where the prices last year grew by 40 - 50%, and inflated in Israel:“ The dollar bonds issued by the Chinese developer companies this year showed the worst results among the obligations of the Asian non-financial companies nominated in dollars. It means that the Chinese market of real estate is overheated, and in the second half of the year we can see falling of the prices to 20%. In the long term similar succession of events waits also for the local market of Israel“.
- Ratio of domestic and external demand for real estate. It is more favorable than investment to those, than domestic demand and consequently, especially the market to a lesser extent depending on “moods“ of foreign buyers is stable is higher.
depends On the one who is the main buyer of real estate in the country how fast and favourably you will sell the object.“ It was fashionable to buy real estate in Panama two years ago, many gave in to this trend, and today cannot turn the assets into money as the main buyers of this real estate were Americans who are not the most active players at the moment“, - Sergey Demchenko (Lemestia group) tells.
Plus to everything professionals analyze the following parameters: amount of objects in the market of sales; sales volumes, rental rates, quantity of new and old housing, the number of the issued or planned construction licenses, increase in demand for real estate within the concrete (large) realtor companies.
Apartment, house or warehouse?for
At last, it is necessary suitable object. If you count on the income from rent, Stanislav Zingel (Gordon Rock), recommends to analyse:
a profitability Indicator from leasing - rental yield - the relation of a revenue of commissioning of the object of real estate for rent to the cost of this object. At the same time it is necessary to distinguish full profitability and true profitability from leasing. Full profitability (gross rental yield) pays off to a deduction of maintenance costs of real estate and taxes. True profitability (net rental yield), respectively, pays off minus expenses and taxes. Estimate more often an indicator of full profitability and if it is more than 10 - 15%, then it speaks about riskiness of investments.
P/E Indicator showing the real estate object price attitude to an annual investment income (to P/E = 1/rental yield). He illustrates payback of object, i.e. reports how many years the owner of real estate needs to lease it to return the paid money.
the Worthy object of investments has to be, first of all, liquid, that to use that the market will grow, say, by 15% if nobody agrees to buy your house. Here it is worth estimating “location, transport availability, infrastructure and services of the project, design, planning solutions, quality of construction. For resort areas important advantages - existence golf - clubs and parking for yachts, and for the large cities - convenient transport availability, proximity to sights and zones of business activity“, - Kirill Dolginsky (Lowell Finance) tells. “Your acquisition has to be in close proximity to bus or railway station, shops, restaurants, a drugstore, hospital. In our opinion, it is better that all these conveniences settled down at distance of 10 minutes of driving“, - Ekaterina Bekarevich, the sales manager of MostProperties agency says. com.“ And the most important - to remember the rule three “L“: location, location, location, - Anastasia Duderova (Delta estate) claims, - even if the object is territorially located in the prestigious and popular area, but in the unsuccessful place (on the suburb, about the road, opposite to gas station etc.), it will never justify hopes “.“ It is necessary to pay attention by sight from windows“, - Andreas Huludis (Pafilia) advises. And among resort real estate the objects located on the first or second line from the sea, mountains or thermal sources are most liquid.“If object of investment - under construction, then the reputation of the builder, his experience, quality of construction and finishing, legal purity of the transaction are important
“, - Andreas Huludis supplements.
Estimating investment appeal of concrete object, it is worth counting expenses which you will incur upon purchase, possession and sale: taxes on purchase and on profit on sale and leasing, a tax on property, expenses on the maintenance of housing, payments for services of management company and utilities, expenses on service of a mortgage loan etc. Cases when all similar expenses nullify the income from investments are not rare. So, Sergey Demchenko, the director of development of the Lemestia group company gives an example, in France income taxes from property sale make more than 20% i.e. to gain even the minimum income from sale, it is necessary that the market grew at least by 25 - 30% on what the minimum
Considering all above, most of experts agree in opinion that the commercial real estate can bring in the greatest the income:“ Are most liquid, and therefore are favorable, the objects in a good shape located in the prestigious places which are characterized by transport availability, and being under high-quality management“, - Denis Evseev, the Managing partner of the KINGSLAND company claims.As for housing, studios, apartments with
, as a rule. In the known resorts (in French riviera or in ski resorts of France) the quite good income is brought in by real estate business - a class, and even luxury. “In the cities the maximum income can be gained from acquisition of studios and single apartments“, - Ekaterina Bekarevich says (MostProperties. com), and in resorts are appreciated apartments with
Correct statistics: where to look for?
can Free of charge receive a set of data on the websites of the large international companies having analytical departments. For example - www. savills. com and www. knightfrank. com. As Elena Yurgeneva, the director of business development of department of elite real estate of Knight Frank reported, on the website of the company it is quarterly possible to get acquainted with the global price index on housing reflecting data of the markets of secondary housing of 47 countries of the world, and monthly - with a price index of the central London. Regularly detailed analytics on various real estate of Great Britain, thematic marketing surveys of real estate are issued (on apartments, houses, shops, hotels, etc.) local reports on the markets of the whole world etc.
can obtain Also free of charge statistical information on the markets of real estate on the website Global Property Guide (www. globalpropertyguide. com) and on portals of the relevant services of the concrete states. For example, will tell the website www about real estate of Great Britain. landregistry. gov. uk. And quite exact information on the countries, their cities and regions contains on official portals of the states. A lot of useful information in open access is on the website of CIA (!) and here on the specialized website www. reutersrealestate. com should be paid for some data to one thousand US dollars a year. Considerably access to the most powerful to statistical system - DataStream costs dearer today, it costs 25 000 euros a month.
But how to distinguish reliable data from doubtful? According to banks, the public statistical and cadastral services it is possible to receive data on construction licenses, on sales volume, on the number of transactions with attraction of mortgage loans, on rental rates. And here such indicator as volumes of investment transactions, it is difficult to define because ask nobody the clients for what they buy real estate. > it is the best of all for p to trust
to the data received in the state and official sources, and also in well proved statistical systems and in the large companies on real estate. The large companies spend up to 5 million. euros a year on the analytical departments, are signed for obtaining paid statistical data.
Also when studying statistics on the market of real estate of this or that country, it is necessary to know that authentic statistical reports always appear with delay, usually for three months (including in Russia), and in the USA and Great Britain - on two.
of the Summary of the magazine about real estate of Metrinfo. Ru
competently to invest means in real estate, it is necessary to study, analyse and check a lot of information, as about the country and the concrete region in which you want to make the investments, and directly about object. The mass of information can be found in the Internet, but not everything can be trusted. It is better to consider data of the large companies on real estate, specialized and official portals, and it is worth remembering that all cataclysms are reflected in the market of real estate with delay, and all indicators have a log not less than two months. And it is the best of all not to drown in the sea of information, to address professionals.