Investing in new construction: an overview of strategies
Investing in new construction is a popular option for investing capital to generate income. Investments in the real estate market are less risky than in other segments. However, in order to get a high return without additional costs, you need to choose the right investment strategy.
There are different variants of investments that differ in the level of profitability. One of them is the purchase of housing that has already been commissioned. This option is not the most profitable in terms of profit, but it is characterized by minimal risk. In this case, after the purchase, you can immediately begin to repair, and after it – rent an apartment or house. Investing in a ready-made facility allows you to save savings from inflation, given that the value of real estate is regularly rising.
The second investment strategy is the purchase of suites, the main advantage of which is the cost. The price of such objects is 10-15% lower than for apartments. However, there are disadvantages – it is difficult to register suites as fully-fledged housing, and high utility bills. At the same time, aparthotel complexes are allowed to build in areas where it is prohibited to build housing. This feature makes it possible to choose a profitable location for the purchase.
The highest yield brings investment in the early stages of real estate construction. The cost of the apartment is influenced not only by the factors of rising prices of construction materials and inflation but also by the progress of construction. As the house is ready, the price rises and the average rate of return for the entire period of construction ranges from 30 to 50%. The only disadvantage of investing in the initial phase of the construction of the object is the risk that the house will not be commissioned. To reduce the likelihood of this option, it is important to choose a reliable builder with a good reputation and long-term work in the market.
Buying an apartment in a house under construction is the best solution in terms of security and profitability. Here you can get a greater benefit than when investing in already completed housing, and protect yourself from project freezing or long construction. When you choose, you should pay attention to the standard terms of erection of objects at this developer. The sooner you get a ready-made house, the sooner the investment will begin to produce an income.
Studying those or other investment strategies, you can consider various special offers and promotions. Many developers attract buyers through favorable installments or loan terms. Developers make an agreement with banks and subsidize their own loans, so the rates are lower than in financial institutions.
Before investing in real estate, it is important to carefully consider the pros and cons of each strategy, and choose a reliable developer, which will minimize the risks of losing money.