Today, we are seeing increasing attractiveness of the real assets, metals and real estate, in light of instability in world financial markets, currency volatility and high inflationary expectations. Real estate offers numerous options in various locations, budgets, levels of involvement and timeframes. Below you can find descriptions of sample investment projects in Moscow, New York and other exciting destinations.
Our clients can use our assistance throughout the entire project or any part of it. We will be glad to find an attractive apartment, assist in designing and re-planning the property, oversee renovation, manage the apartment to find reliable tenants, and help market the property for sale to realize maximum profit.
Investment project under $ 300 000 Read
Investment project in the CIS Read
Investment projects in the Euro zone Read
Investment project under $ 300 000
Small apartment investment project
As Moscow real estate market is most likely entering another period of growth, we could suggest the following investment project. Comparatively small size of the project and low carrying costs of real estate in Russia, combined with low acquisition costs and high rental values make it an attractive investment.
Step 1: Purchase a one room apartment for up to $245,000
By local standards, every one room apartment is not a classic studio as it is viewed in New York and most European cities, but a one room plus a separate kitchen. This allows changing the floor plan, so that it becomes an “alcove studio”. In such a studio the sleeping area can be separated from the rest of the apartment by either French doors or at least a curtain, while kitchen space and part of the room could allow for the living / dining / working arrangement.
Step 2: Renovate
Necessary renovation includes change of plan and significant upgrade of the apartment. The cost of such renovation is estimated at around $25,000. Renovation has to include kitchen cabinetry and relevant equipment installation: washing machine, small dishwasher where space allows, water heater for temporary use in summer, and in some cases basic furniture.
Step 3: Rent out
Depending on the season, quality of renovation and overall quality of the apartment (building, view, exposure and other features) such apartments command rents of around $2,000 per month. Additionally, as a protection against depreciating dollar, it is possible to denominate rent in ruble or euro, which has been appreciating steadily against the dollar, and this trend is likely to continue in the near future.
Sample calculations:
| Purchase price |
$ 245 000 |
| Broker's fee |
$ 12 250 |
| Renovation |
$ 25 000 |
| Total expense |
$ 282 250 |
|
|
| Monthly rent |
$ 2 000 |
| Yearly rent |
$ 24 000 |
| Return from rent |
8,50% |
Increased value
By renovating the apartment and upgrading it to the contemporary lifestyle, the apartment value is already increased by approximately 15%. It is also easier to resell an apartment in a better condition than one in need of renovation.
Simplified scenario: rent out “as is”
For those who wish to avoid the downtime and not do any improvements to the property, rental “as is” is also a possibility. Although return is lower, such projects still offer investors the benefits of appreciation and the cost of capital is offset by the rental income.
Sample calculations are below:
| Purchase price |
$ 245 000 |
| Broker's fee |
$ 12 250 |
| Total expense |
$ 257 250 |
|
|
| Monthly rent |
$ 1 000 |
| Yearly rent |
$ 12 000 |
| Return from rent |
4,7% |
Appreciation
Moscow real estate market has demonstrated unprecedented growth, increasing in value 6 times over the last 5 years. Considering worldwide inflationary trends and growing attractiveness of real assets, it is conservative to predict 20% yearly appreciation.
Step 4: Exit with profit
Normally, it is easy to find a buyer for a small apartment in good condition. For tax residents of Russia, we recommend holding apartments for 3 years to avoid the income tax. For non-residents, profitable exit is possible earlier as there is no tax incentive to hold the property.
Please contact us if you would like to learn more about this or other investment options.
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Investment project in the CIS
Some of the former Soviet republics offer exciting investment opportunities. We feel that Ukraine and Georgia, which recently underwent dramatic changes and demonstrated strong allegiance to Western values, offer particularly attractive opportunities.
Ready made rental business in Kiev, Ukraine
Kiev property market demonstrated remarkable growth, ranging from 30% to 60% per year during the last 5 years. New leadership, which came to power after the “orange revolution” and was recently reelected, makes creating an investment friendly environment one of its highest priorities. Modern, electronic registrar and property rights transfer and registration procedure make investment in Ukrainian real estate a safe and attractive venture.
Fully renovated 2-bedroom apartment with 1,5 bathrooms in the most central and prestigious location of the Ukrainian capital comes with the corporate tenant in place. Apartment features modern kitchen with dishwasher, refrigerator, stove and oven, exhaust fan, and washing machine. Each room has a modern air-conditioning unit. Rental payments are made quarterly in advance, one month security deposit is offered to the landlord as tenant’s performance guarantee.
These great terms make this a very safe investment. Expenses, such as communal charges, are paid by the tenant. Property tax in Ukraine is nominal and is currently less than $100 per year, therefore is omitted in our calculations.
| Purchase price |
$ 500 000 |
| Monthly rent |
$ 3 200 |
| Yearly rent |
$ 38 400 |
| Return from rent |
7,7% |
More information about this property
Other investment opportunities in Kiev, Ukraine.
Please contact us if you would like to learn more about this or other investment options.
Investment projects in Guduari ski resort, Georgia
Gudauri – is a rapidly developing ski resort located in Kazbegi region of Georgia, 120 km from Tbilisi, 2,196 m (about 7,200 feet) above the sea level. There is a modern highway connecting Gudauri and Tbilisi, the capital of Georgia, and the drive from the Tbilisi International airport takes less than two hours. Skiing season lasts from December to April, offering unique skiing options including heli-skiing. During the summer it becomes a hiking and mountain sports resort.
Townhouses: descriptions and numbers
- Ski-in, ski-out
- 980 Euro per meter, total area of a townhouse – 280 sq. m. (3 out of 10 units still available). Operating costs – 6000Euro (conservative high estimate)
- Flexible floor plans, fit out according to the owner’s choice. Suggested floor plan features 5 bedrooms, 5 bathrooms, open plan kitchen, dining and living area, sauna, storage and ski-room
- Construction completion – November 2008 ready for final fit out
- Rental expectations: 70-90 euro per bedroom per night during the ski season with occupancy of 80-85%; 40-50 euro per bedroom per night in summer with occupancy of 40-50%. Yield from rent – 19%
Concept: catered chalets
We plan to introduce a popular European concept of catered chalet in Georgia, making the stay of our guests comfortable and hassle-free. They will not have to look for a restaurant or a store, enjoying the privacy of their own chalet and the comforts of a five star hotel: gourmet cooking according to personal dietary requirements, daily cleaning and driver’s services. These additional high-quality services will be a competitive advantage of the property and will make the property owners desired partners for corporate clients and travel agencies.
More information about this project
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Investment projects in the Euro zone
Europe presents attractive investment opportunities, especially in the economically stable countries of the European Union. Being the largest European economy, Germany offers high capital growth potential, particularly in the capital city of Berlin, where prices are still up to 30% lower than in any other major city in Germany.
Berlin real estate
The city of 3.4 million residents, Berlin is undergoing a lot of development to catch up with the housing shortage. Property prices have been increasing at an average of 7.8% over the past two years, and the rental index has been rising at an average of 5.8%. Foreign investors enjoy mortgage options and a fully regulated legal process.
We can offer several buy-to-let options that yield a guaranteed 5% net yield per year, all fully refurbished and in sought after locations. Apartments are managed by a professional local management company, providing the owners with a guaranteed rental return throughout the length of the contract. For all of the properties below, foreigners can take advantage of up to 60% financing.
There are suitable options for different budgets:
Please contact us if you would like to learn more about investment options in Europe, USA or Russia.
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