The market for income-generating cottages in Ukraine: who builds the most and how investors profit from it

The market for income-generating tourist real estate in Ukraine continues to grow even during a period of full-scale war. Investors are increasingly turning their attention to cottage towns and resort complexes in the Carpathians as a means of preserving capital, generating regular income, or increasing asset value.

In its new ranking, Forbes Ukraine analysed key developers of income-generating cottages and showed how much investors can actually earn or lose, depending on the format of the project, the stage of entry, and the management model.

Management as the key to profitability

The Forbes article specifically notes that in the income property format, it is not only location or entry price that plays a decisive role, but also the efficiency of the management company. It is the management company that is responsible for occupancy rates, operating costs, service and, ultimately, the financial result for the investor.

The Forbes ranking mentions several developers whose properties are or will be managed by Ribas Hotels Group:

MBA Development Group — the Malachite cottage community with a projected yield of up to 12% per annum and capitalisation of up to 15%. Twenty cottages in the Morion cottage community in Mikulychyn have already been built, and another 31 cottages and six townhouses in the same Mikulychyn in the Agat Resort & SPA cottage community have been built and sold.

Effectbud Karpaty — the Pavza project in Mikulychyn, with a focus on compact formats and returns of up to 12% per annum.

Arha Group — the Potay and Ama Family Resort cottage complexes in Yablunytsia and Polianytsia with forecasts of up to 16% per annum depending on the stage of entry.

What this means for investors

For investors, this kind of partnership means a clearly structured model:

• the investor keeps ownership;
• a professional hotel operator takes care of the day-to-day running, occupancy, and service;
• income comes from tourist traffic and systematic management, not one-off sales.

Forbes also draws attention to market risks: limited liquidity of secondary sales and dependence of results on demand. That is why professional management becomes a critical factor in the long-term stability of projects.

As noted by blogger and founder of the Ukrinvestclub community Dmitry Karpilovsky and head of the Investhub community Oles Varenik, investors should consider not only potential income, but also risks, in particular, the lack of a regulated secondary market and possible difficulties with selling properties.

For more information on conditions for investors and the rating of developers, read the full Forbes article: ‘Rating of developers of income-generating cottages: how much investors can earn (or lose)’.