Buying an apartment in a new building for resale: how much you can earn
How much and for how long it is possible to “beat off” investments when buying an apartment in new buildings with resale
The percentage of buyers of apartments who invest in real estate and plan to sell apartments after putting the house into operation is growing. This is a fairly profitable business, but risky at the same time. The capital real estate portal 100realty.ua found out in which houses it is better to buy apartments in a new building, how much you can earn and how to reduce risks.
We make the right choice of an apartment in a new building
It is difficult to estimate the proportion of transactions for resale, since not all investors are spreading their plans, and these plans themselves may change over time.
“But one general tendency can still be noted. For subsequent resale or rental, apartments in central areas and in higher class buildings are more often bought today. And in the most affordable residential complexes, not too close to the city center, they take more to live in them themselves, ”says Gleb Shemovnev, spokeswoman for Ukrbud Corporation.
In order to profitably sell an apartment in a new house, you need to choose a liquid object. Experts advise to pay attention, first of all, to the infrastructure of the residential complex, its location, the image of the developer, the layout of the apartment, etc.
Related article: Apartment in a new building: how to assess the quality of construction, profitability and risks
What increases the price of an apartment in a new building
location near the metro or convenient transportation;
closed territory of the LCD;
own infrastructure (shops, sports and playgrounds, bank branches, pharmacies, etc.);
free layout of the apartment. The ability to make a spacious kitchen-living room;
image of the developer. A number of companies are operating in Kiev, buying apartments from which is prestigious. Customers formed the opinion that they are building efficiently, living in their LCD will be comfortable.
As for the areas, most often they buy one-room apartments with an area of 40-45 square meters. m, two-room apartments – 60-75 sq. m. m. It is these apartments that should be considered in the first place, if you want to make money on resale. It is best to choose apartments located at the ends of a common corridor, and not, for example, opposite the exit from the elevator. Also, corner apartments are not very popular, as they can be colder in winter, unlike apartments that are surrounded by neighbors on each side.
How much can you earn by buying an apartment in a new building?
Despite a number of risks, buying an apartment in a new building at the initial stage of construction and its subsequent sale can bring excellent profits.
“Depending on the location, class and scale of the residential complex, as well as the size of the apartment, the difference in cost per square meter at the initial stage of construction and after commissioning can be 30-50%,” says Andrei Ryzhikov, CEO and managing partner of DC Evolution.
Given year-on-year price increases, revenue may also rise.
“Given the average construction period (3.5 years), the annual return on investment at the start of sales may be about 16.5%. This is only relative to the price from the developer. But do not forget about the general trend towards stable growth in housing prices in the capital. For example, last year the cost per square meter grew by an average of 8%, ”says Gleb Shemovnev.
Risks when buying an apartment in a new building and how to reduce them
Naturally, buying an apartment at the construction stage is always risky. Even companies operating in the market for a long time can become authors of long-term construction and then you can forget about profit.
“Buying at the excavation stage is, of course, a high-risk tool. It should be noted that this investment can only be called for a person who buys half a house at once or at least three floors. All the rest are just buyers of apartments. Where are the guarantees that the object will be completed? They are not here. None of the existing purchase mechanisms guarantees that the object will be completed and put into operation. Therefore, we must be prepared for the fact that in case of freezing the project this money cannot be returned, ”says Mr. Ryzhikov.
Related article: Apartment for rent in Kiev: how to calculate future income and expenses
“Ukraine is in difficult economic conditions, and the threat of another crisis continues to persist. If such a crisis occurs, then even a bona fide company may not be able to cope with it, simply by incorrectly calculating its strengths and capabilities. Therefore, it is worth trusting your investments only to those companies that have long been working in the market, have a large margin of safety and have worthily gone through previous crisis periods. If such a developer completes all his houses and does not leave customers without the promised apartments, this is a good sign for a potential investor, ”adds Gleb Shemovnev.