Specialists of the management company Ribas Hotels Group have sorted out options for purchasing, assigning and further real estate exploitation.
Buy an apartment to rent it out later — this algorithm for real estate sales seems to be as old as the world. In the post-Soviet space, it is considered the most reliable way to save and earn money.
However, investment in this industry is considered a profitable investment not only in our country. Last year, the number of transactions in the global real estate market for investment broke all known records and increased by 4%. The most popular cities for investment are London, New York and Paris.
— As for Ukraine, the investment climate is improving every year. And it is becoming very attractive not only for domestic capital holders, but also for foreign businessmen, " says Artur lupashko, CEO of Ribas Hotels Group. — We add contrary to forecasts, the country's construction market has not collapsed at all, but is slowly growing. Together with the median price per square meter of residential real estate in the primary market. From January to July of this year, for example, it grew by 6%. And let's fix another interesting figure: according to various sources, the personal savings of Ukrainians are about $40 billion. We get very bright perspectives.
The share of purchased housing in installments from the developer is growing at such a pace that it may well add up to almost the main trend in the primary real estate market. This year, the total number of apartments sold in this way reaches 55% of the total number of transactions. This state of Affairs is due to favorable conditions. For example, in recent years and to this moment, interest-free installments are popular until the house is put into operation – on average up to 2 years.
How the market reacts
— The market is already in quite obvious progress on the qualitative and quantitative levels. It should be noted that the demand for the segment of the higher price category is growing noticeably. It gradually increases the gap from economy housing options. Therefore, the offer is also tightened.
Experts in the real estate sector talk about the possibility of getting up to 8% or more of the cost of an apartment annually. However, this depends on many factors: location, squaring, freshness and quality of repairs, etc.
In addition, a few years ago, around 2016, micro-investors who invested in stocks and deposits, considered them insufficiently reliable and decided to purchase real estate.
Range of advantages
In the purchased property, you can arrange:
- apartment for daily rent (about 7% per annum)
- coworking (7-8% per annum, make sure that your area is included in the zone for commercial use according to the construction plan of the residential complex "your" area is). Working spaces in European countries and the United States, by the way, give twice as much profit).
- hostels, mini-hotels (up to 12% per annum-see the statement about coworking: commercial rule applies).
The last option, for obvious reasons, is the main interest for investors. And it's not a surprise. Having purchased a property for the purpose of organizing a hotel facility in it, the owner can immediately contact HoReCa specialists, who organize all the processes so that the object becomes profitable in the shortest time possible.
Pros and cons
Among the unfavorable factors there is the presence of neighbors with whom you will need to discuss and notarize your consent to the type of activity that you plan to do. If the owner buys the entire floor of the building for a mini-hotel, this complexity is minimized.
It is also necessary to take into account that the interior, furniture, textiles eventually wear out, become outdated. Therefore, it is necessary to include the depreciation of residential space and property in it in the budget .
If the property is decided to turn into an object of hospitality, it is better to hire a professional Manager. His salary and related expenses, in this case, are included in our conditional minus.
The pros are solid and undeniable:
- The reliability of investments and passivity of income, which allows the owner to simultaneously engage in other types of business, travel, study, etc.
- Of course, you can create the necessary comfort in the purchased real estate and hire a realtor without the help of hotel specialists.
But it's not that simple
Let's consider the facts that in most cases people who plan to rent out newly purchased apartments do not take into account.
So, what are the calculations of the person who posted an ad or asked a realtor to rent out an apartment for $ 60 a day? The homeowner is absolutely sincerely hoping to earn an average of about $ 1,800 a month. And more over $21,000 in passive income per year.
However, it is almost impossible to achieve 100% occupancy of all days of the month. There is also a seasonality effect that is very familiar to hoteliers. In the summer occupancy is not a problem, but in the off-season an apartment that is rented out daily will be idle for longer than it will bring a measurable income.
But even if it is possible to find a realtor who will "supply" residents constantly, the rented square meters will be occupied for no more than twenty-four or five days, since it is quite difficult to achieve uninterrupted sequence of residents.
As a result, with a successful combination of circumstances, the homeowner will be able to earn from 1100 to 1500 dollars a month. To get a figure of net profit from this amount, you need to deduct utility bills, cleaning costs, repairs of possible breakdowns and depreciation of furniture and equipment in the apartment, realtor commissions or online booking sites.
In addition, you must understand that a guest who rents an apartment for a day or more is waiting for service, as in hotels: bed linen replacement, cleanliness. The only exception is he doesn't count on Breakfast included.
Why do you need help?
If an entrepreneur has a goal to get a stable, guaranteed income, and not to fill an empty living space, then the help of experts is needed at the earliest stages. Practically, since the purchase of the apartment. Or even better-before buying, to make the best choice for investment.
A professional hotel management company (CC) will also be interested in increasing the profit and full occupancy. It can not only provide a constant flow of guests, but also increase the cost of rooms by providing them with a service component. Experts can also recommend the most favorable areas for purchasing real estate. Kiev, Odessa, Lviv, Truskavets and Yaremcha, for example, are the leading cities with a high degree of profitability of objects for daily delivery.
Despite the high competition, it is still profitable to buy mini-hotels and apartments for daily rent. Especially in resort towns such as.
In addition, hotel companies have favorable terms and contracts with various suppliers and can provide much more profitable leasing services to increase revenue and automate work processes. And not only that. By contacting the company at the stage of choosing a location for buying real estate, the future owner of square meters can get a nice bonus-saving on many construction materials and avoiding many mistakes at the initial stages of entering this business.
For example, the turnover of our company's purchases allowed us to get a discount from an Italian supplier, which "outbid" the offer of their Polish colleague. As a result, one of the objects we are designing will have Italian ceramics in the bathrooms instead of Polish ones.
There are a number of other advantages that we can offer to potential property owners. For more detailed discussions, just call our development Department and talk to our specialists: +38 (048) 706-47-36 or come to our office: 25 Gagarin Ave., Odessa