How to make money on real estate? Real estate business

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

For a long time, real estate has been one of the most reliable ways to save money. Such a guarantee cannot be expected from money, nor from gold, nor from precious stones. Jewelry and precious metals are movable property and can be lost fairly easily, while cash is subject to inflation and suffers from monetary reforms. Housing is always valuable. And it can even serve as a tool for making a profit. If you know how to make money on real estate, you can establish a very real and reliable business. Let's take a quick look at its main schemes.

How it works

So, we earn on the sale of real estate. And not only on it. Investing in residential properties can be done on a different scale and in different ways. Namely, buying and reselling apartments, renting out premises or opening your own intermediary business in the form of a private real estate agency. You can also buy or rent commercial premises. Other real estate (cottages) as an object of resale is listed less due to the high cost of a housing unit, but is also quite in demand.

Not every of these methods is available to anyone. Buying a home or renting a commercial fund requires an investment of very, very considerable initial funds. Such investments can be afforded mainly by commercial organizations. Among their opportunities is obtaining a bank loan for their own project. But a real estate business, that is, earnings on transactions with its purchase and sale, is also available to an individual with the necessary initial capital.

What are the main risks

The main business risk in this area is the lack of a quick payback and possible losses in connection with this. The most popular type of such investment is the purchase of housing (a separate apartment) for the purpose of further sale. In recent years, due to the crisis and falling prices in this area, the volume of investments in such transactions has significantly decreased and amounts to no more than 15%. This is explained by the lack of increased demand, as opposed to the housing boom of the early 2000s.

Buying a home in the face of growing demand for it guarantees multiple earnings when reselling it. This is especially true for those who managed to invest free finances in this area in the last decades of the last century. After 10-15 years, the profit in such transactions amounted to ten times the size.

Today, such an effect can no longer be expected, since periods of particularly rapid growth in demand for housing (and, accordingly, prices) are not expected in the near future. At present, the domestic market is rather in a phasedowngrades. Significantly increase in price only objects of affordable housing. In large cities, including the capital, expensive real estate is not in high demand.

About shared construction

The best option for investment is housing in new buildings. Other real estate ("secondary property") will not give such an effect. Buying in a house at the excavation stage will be the cheapest. By purchasing an apartment in the initial phase of construction, you save about 30% of its cost. In a stable market, this is exactly the figure of profit, the calculation of which investors can be considered quite realistic.

But one should not discount the huge mass of risks of the shared construction system. At the earliest stage, their value is maximum. To reduce risks, you should choose only developers with sufficient experience and a solid reputation. Indirect, but not absolute, signs of this can be a lot of previously commissioned objects, conducting activities in accordance with the provisions of the Federal Law No. 214 "On Equity Participation", a system of credit relations with one of the state-owned banks, which, as you know, choose partners carefully and carefully.

Which apartments to buy

How to make money on real estate, having the amount necessary for investment? Which apartment is better to buy? If you plan to sell it further, choose a monolithic house. This will increase the future market value of the property. The price depends, in addition, on the degree of livability of the surrounding area, the quality of infrastructure, the availability of a number of necessarysocial facilities in the form of a school, a kindergarten, a hospital and a chain of stores, good transport interchange, and in Moscow - proximity to the metro and the overall rating of the area.

Those who do business in the capital are advised to focus on plans for the construction and expansion of the metro network. In Moscow, interest in real estate located outside the Moscow Ring Road has increased these days. The reasons are the rise in prices for such apartments when connecting to the former remote area of the metro line. The cost of housing increases in such cases by 15-30%.

What you should know about real estate in the suburbs

Housing prices are growing not only in Moscow, but also in the region. The cheapest real estate in the Moscow region is apartments in new buildings in Zelenograd. This is due to some remoteness of the city from the Moscow Ring Road. Moreover, the infrastructure of this area has no worse than Moscow. In addition, you should pay attention to the areas of Solntsevo, where it is planned to open a metro line this year, Yuzhnoye Butovo, Dmitrovsky, etc.

Another option for investing in real estate is renting it out. How to make money renting real estate? Rented housing is in demand almost always. After all, not everyone can afford to buy their own apartment. A person planning such an option needs either a free property (an apartment) or a certain amount in the form of initial capital.

You can use this money by renting suitable housing for the purpose of subsequent delivery. Ifenough funds to buy an apartment, which you can later rent out, consider that your business expects inevitable success.

Result - not soon…

But it should be borne in mind that the purposeful purchase of an apartment for future rent is not the fastest business. Its payback is not so great. In Moscow, buying an average-priced "odnushka" will justify itself in about fifteen years, for a two-room apartment this period is sixteen - eighteen years, and the cost of a "three-ruble note" is such that you can return all the funds invested in the purchase, perhaps, only after a quarter of a century.

How to make money on real estate using a mortgage? And is it possible? Contrary to the common scheme with buying an apartment on a mortgage and then renting it out, the payback of such housing does not hold water. This property requires very long loan repayments with interest. The process drags on for decades. The final cost of housing as a result is overestimated by a couple of times. Renting out such an apartment does not bring any tangible profit, the maximum covers the payment of the loan.

Which apartments are being rented

So, you have decided to buy an apartment for rent. What is better to choose? The most popular are one-room apartments. They are chosen for rent most often. The requirements for the house in this case are not too high. It can be both panel and not too prestigious. If you do not allow the thought of the future sale of such an apartment or use it for your own needs, the budgethousing in a five-story panel building is a good option in terms of saving initial investments. But, bearing in mind the possible prospect of sale, you should take care of its acceptable quality.

Most often, the ultimate prospect of such an apartment is to become the future home of the younger generation of the investor's family. In this sense, investing in housing is a smart and promising step. By the time the child comes of age, the apartment will pay for itself and increase in price many times over. By renting housing that is not yet in demand, you will return the initial investment and will be able to make an excellent valuable gift for your son or daughter for the age of majority, almost free of charge.

If there is no money

Is it possible to start a real estate business without investing a single penny of initial capital? We'll have to disappoint you - this idea is one of the unrealizable fairy tales for lovers of freebies. Even deciding to rent out your own apartment, think about the need to bring it to a decent condition. That is, the cost of a good cosmetic repair will be required.

Investments will also require the search for suitable options, and payment of partially or fully housing and communal services for purchased objects, and much more. Therefore, there is nothing to do in this business without initial funds.

Moscow real estate - a gold mine?

The capital, with its exorbitant housing prices, is the most promising place in terms of such earnings for its indigenous people. The most common option for investing in real estate for an ordinary Muscovite is renting out their own apartment ina good area for very decent money with relocation to live in rented housing in any of the cities of the Moscow region, where the cost of rent is several times lower.

Some people decide to sell expensive Moscow real estate and buy cheaper ones in the Moscow region. The difference in money is invested in the lease of additional premises for the purpose of commercial hiring. A capital apartment, in addition, can be converted into a hostel and rented by the day. As you know, retail rental prices are incomparable with long-term rentals.

Other options

How to make money on real estate when there is no extra living space at your disposal and is not expected? If at the same time you live in a "kopeck piece" or "treshka", and one room remains unoccupied, this free living space can be rented.

Some "apartment" businessmen purposefully buy up apartments, choosing the most "killed" - without any repairs, often in a terrible state. As a rule - the former property of alcoholics and other lumpen. The market value of such housing is somewhat lower than average, and, having forked out for a decent repair, it is possible to return the invested funds with a significant “additive” during the subsequent sale. After all, the internal condition of the apartment is the first thing that a potential buyer will pay attention to. Many are purposefully looking for renovated housing, as they do not have the strength or desire to mess around on their own, and are ready to pay for it.

There is such a profession

How to make money onreal estate from scratch? What is the least expensive investment method? Perhaps, here we can talk about private re altorship. An intermediary in apartment transactions does not require initial capital, because the principle of such earnings is to receive a percentage of commission from the client for the services rendered. But this business can not be attributed to easy and uncomplicated. Those who choose real estate activity will have to study a huge array of information, actively move around the city, communicate with a huge number of potential clients, the search for which is more difficult for a single businessman than for a professional promoted agency with ample opportunities for self-promotion.

From a re altor, in addition to dexterity and penetrating abilities, good communication skills and psychological instinct are required. In this case, the first results can be expected no earlier than in a year. And therefore, at first, it makes sense to conduct such activities only on the basis of additional earnings - as an initial step in the development of future business.