Real estate is the only product made by a person who doesn’t lose his monthly cost. The constant cheapening in the process of operation is typical for automobiles, household appliances, the most cool and clever gadgets, clothes and shoes. But not for real estate. Of course, there are many fundamental reasons, but the intention is not in the scope of this review to delve into them.
Not for the first month, like in 2008, we hear that real estate has become completely uninteresting that it is impossible to make, all builders and developers are waiting for the ruin, but the available money should be invested anywhere, just away from square meters.
Having experience in the positions of head of Department, commercial Director, working in the management Board of major construction companies, and having completed many construction and commercial projects, I can say one thing – it’s all talk losers, and the attitude towards them should be from the “the dog barks – the caravan goes”.
The review, which I invite Your attention today, this is my answer to those ignoramuses and “cant wait for the supermen”, which is said to rest those who actually does something and gets the result.
In this review I will consider two main paths in real estate – how to make money on the property owner and how to make money on real estate investor.
So, you are still on the first stage of its journey into the world of those who provided their own financial stability through real estate transactions. You – the owner. How do you earn?
1. Rent for a long period.
Many people in this country in the last 10-15 years to discover this good and not requiring ongoing earnings. From the business point of view this is a very good and marketable business approach. It is simple, stable, understandable to all, and requires no special knowledge and education. Of course, you will be able to find a common language with tenants, possible neighbors. But when well-designed documents between You and your tenants, it will not cause absolutely any problems. Long term rental is the possibility to organize your time so that You will have to spend more than one hour a month (!) to get to the apartment, take the money, go to the management company for payment of utility services, and – home. By the way, prevailing in our country practice States that utilities pay according to the meter readings.
Of course, there are those people who say that it is better to sell the apartment and put the money in the Bank. But, first, rental housing may be only one, and in our country for a lot of people who rent the main apartment, and move into other housing: less komnatnuju, maybe in a less prestigious area in the summer – at the cottage or in the village. In this case, the difference between the obtained rent and the cost of new housing and profit from this type of activity.
Secondly, the profitability of the business is your annual rent from the rental of apartments, divided by its market value and expressed in percent. So, if you have one price of 1.5 million rubles, which You take for 12 thousand roubles a month, then the profitability of Your business 8% per annum.
Main rules – always take a Deposit in the amount of the monthly payment, be sure to sign a contract and, if possible, insure Your apartment.
2. Rent for hours and days.
This is one of the most popular searches on any real estate portal. Moreover, during the crisis, the clientele of this business is only growing. For some reason You probably guess yourself. Hotels are getting more expensive, and these costs are already not everyone can afford.
The main thing in this business is the location. Next should be stop and shop. The apartment itself is modern in decor and pleasant to look at. “So-so” is the worst option. It is better little kopeck piece or odnushki, reworked in the Studio.
The main clients are young couples, seconded staff, quarreled with the couple and tourists. To rent an apartment will be for a few hours and a couple of weeks. A characteristic feature of this business is repeat customers. If Your apartment is good in quality and adequate for the price, they will return again or recommend You to friends.
The profit margins in this business even with the additional costs of staff to clean the apartment more than two and a half times higher than the profitability from a long-term lease. To learn about the specific arrangements on this business, as well as arm the exact starting numbers, just ask on the Internet request, and You will see a complete confirmation of all my words.
I’m not arguing that real estate to earn money easier for those who have this property already. But the lack of square meters in the property – not the brand. Here the key concept is property. To dispose of the property, not necessarily to be the owner. You can be a tenant. And earn on the sublease.
Budding entrepreneurs usually start with renting someone else’s apartment. Of course, the owner is unlikely to allow You to make global changes in the apartment (appliances, furniture). However, there may be an exception — if You agree with your landlord that it is under repair on account of rent. Thus, the earnings you can begin with investments less than 100 thousand rubles.
In the end, the profit from this business can be directed to its extension, and eventually create a network of several such apartments.
If You have a Studio apartment, and quite a cozy “three”, then consider opening it in the hostel.
The hostel is a Western European hospitality scheme that offers its clients short or long term berth without facilities in the room. Facilities – bathroom, shower and kitchen are common areas. At the same time in rooms can be placed multiple people, but in practice a room is often rented by the company, or redeem it entirely, as it still comes out cheaper than hotel accommodation or a separate rental apartment. Rooms are equipped with beds and air conditioning.
Hostels are popular in large cities or resort towns.
The profitability of hostels with an average of about 15%, i.e. is somewhere between renting an apartment for long term rent and passing it on hours and days.
5. Was the garage, was the garage.
The budget option is, of course, to figure out what to do with Your garage. Of course, the easiest option is just to rent it. But profitability is low, of course, provided that the garage is not in the center of Moscow.
However, if you put in a little effort, it is quite possible to take your garage already as full-fledged business. Although most major garages already have almost everything you need, namely: a viewing hole, an insulated gate, electricity.
Plus there will be a paved driveway to the garage, the ability to install signage that will be visible from the first lines, water and sewer.
If You are in the pre-crisis period managed to put together a little capital, then congratulations. You are an investor. And believe me – You have much more ways to earn per square meters even in a crisis.
6. Urgent purchase of apartments.
Open almost any newspaper, You will easily find a lot of ads about “urgent purchase” of apartments, buying “apartments with debts”, etc. In principle, we all understand what we are talking about. However, let’s look at this business, as they say, on the other side of the barricades.
I would not say that urgent purchase of housing in our country is common. And the major players in this market – largest real estate agencies that have not only experience rapid implementation of the apartment, but also established and current client base. Nevertheless, there is in the market place and for private investors. The barrier of entry is low, and the practice of combining the capital of several investors (or in human language – “pooling of funds”) also has not been canceled.
Redemption subject those properties, which you can easily determine market value and at least roughly determine the period of sale. It makes little sense to consider Prime real estate as the object of immediate redemption is likely to go wrong is high, and the time of sale may take a year or two. That is why those who practice urgent purchase, operate in the segment of the mass market of secondary housing – one and two bedroom apartments.
Of course, the landlord, resorting to the service of urgent sale, gives it significantly, sometimes by 30-40% below market.
In this case Your profit as an investor, will also change depending on the chosen strategy: you can resell the apartment to a new owner off of the market value of 10 percent and to hold an apartment for 2-3 weeks while he, for example, looking for money or makes a loan, and you can set your maximum price and earn the rent.
7. Translation in non-residential premises.
I think, for anybody not a secret that the owner of the commercial areas are in a more favourable situation compared to the owner of the apartment on the ground floor – this also applies to the market value of the property, and the amount of rent. Moreover, becoming the owner of non-residential premises at the ground floor of the house, You as an investor acquire a wide range of activities, which will be able to earn – trade, services, etc.
On the other side of the coin – complicated bureaucratic procedures for approval of such translation, as in the local government (it’s flowers) and the residents of the house where the apartment is located (but that’s the berries).
The process of translation itself is a topic for another article, and perhaps not even one. And the only advice I’m willing to give here is that do invest, and refer to specialists, most of whom, as a rule, former employees of the local authority, and who for a fee will help You save a lot of nerves.
8. Buy – decorate – selling.
Very good option for earning money on the apartments. Here everything is quite simple – we buy the flat, is contained in “God’s view”, for sale. Many skeptics believe that this option will not work in a crisis, but the trick is that it works always. To confirm this I can cite a couple of examples from other industries. For example, cars.
Everyone knows about the existence of such profession as “outbid”. These guys buy used cars, bring them to order and sell. Because first, good in the car, and secondly, their customers just want to buy a car in good condition, no scratches, dents, etc. Understand the clients dealers that overpay? Of course. Or any bakery next door to Your house. The ingredients for the bread You can buy in any store – flour, egg, salt, sugar, yeast. And bake bread or a loaf of bread at home. But You buy them in the bakery. Knowing that the price is significantly above cost.
Why do the dealers and hlebopechka have customers? Yes, because it’s just not our profession – we are not experts in these industries, we want to sit in a car or are willing to cut a piece of the finished bread. In real estate the same!
The main principle is to look for the cheapest accommodation. With the most wretched photographs. This will give You a discount from 10% to 15% of the market. Finishers also looking for the most affordable is not a premium repair. But You must subotici two things – the entrance and the view from the window.
And, by the way, our goal is not just to make money, but to do it quickly. Quickly buy, quick to decorate, to sell quickly. Therefore, no elite housing, we need the mass market. No finishing materials with delivery from Europe – only something that you can take immediately. Decorators looking for a long time, take those that are simple to us will be expensive. Practice shows that at a constant control – and this 3 times per day – one bedroom apartment from scratch is in order this week. This with replacement Windows and exterior doors.
I have already wrote about a similar repair,Oh and articles about the marginality of this business the Internet is full of. By the way, while Your apartment is for sale, nothing prevents You to combine this income with another, about which I spoke a little higher – rent for hours and days.
Regardless of what you buy — new or second homes, you are entitled to a tax deduction in the amount of 13% of the value of the object, and also you have obligation of paying property tax.
9. Buy apartments combined into one.
Those who at least once faced the need to buy a big apartment house (3 or more), studying the data sheet, often drew attention to the fact that she modeled two apartments. So did those who bought apartments in buildings where 3 or more rooms in a housing, in principle, no.
And there’s the fact that the average square meter in three-room apartment will always be cheaper than one-at least for the reason that the demand for “treshki” is not as big as on “odnushki”. In the end, separating the back-bedroom apartment, you can get a significant income purely legal procedure.
10. Buy at auctions bankruptcies.
This theme can significantly reduce the initial costs when entering a number of themes – take at least a rental, though resale. Because we are talking about the auctions for the sale of property seized from those who failed to fulfill their obligations to creditors.
In the role of those who organize and conduct these auctions are usually two directions the players. It is either the largest banks, such as Sberbank, VTB24, Rosselkhozbank. Or state agencies, authorized to take such action – the Federal bailiff service, the relevant Ministry (especially regional), etc.
To find out what is exposed in is currently for sale and what the initial prices, just go to the websites of the banks – take the top ten Federal banks, and one or two regional (depending on the region where You live). Looking for on the website section “foreclosure sale” and see. You can do without the Internet – so, in Sberbank such things deals with the Department “On work with overdue debts”, and where you can buy, among other things, not only real estate, but also cars, electronics, etc. All that people in his time took out loans.
FSSP also comes with seized property through public auction.
Look closely, you can sometimes buy property at a discount up to 50% of the market value.
11. Invest in construction.
On average, the market price of the apartment since the beginning of construction and before putting the house increases by about a third. Of course, now below market value. But the most interesting is that her purchase price from the company-developer, in the crisis fell. I.e., in absolutely terms, the margin remains the same – from 300 thousand to 1 million rubles. But in relative – grown! For example, from 500 thousand to 3 million is not the same that 500 thousand from 2 million – in the first case, the margin is 17% and the second 25% off!
How to buy from the developer in the crisis, on what to pay attention to it.d., I already told you. And the web is now full of information on this subject, so once again not going to go deep, where to buy, You decide.
Better touch on another important issue – when to sell the apartment? Naturally, it is better to do it on stage of completion. I.e. in the moment when you can sell it without registration of the property.
Of course, some investors specify in the contract the sum stated in the agreement the equity and the difference are either without registration, or write in the receipt for the “finishing materials”. However, You should know that our law clearly interprets this as an evasion.