A profitable option when buying a property for demolition is to purchase a room, since in exchange, by law, the developer is required to provide you with a separate apartment, although it will be of a minimum area. However, it is worth considering the problems associated with the purchase of such housing. Firstly, a long investment cycle due to the long waiting period for the completion of the construction of a new house. It is also worth considering the possibility of repeatedly postponing commissioning.
Secondly, it is difficult to find the corresponding lots on the real estate market, since the owners of such apartments significantly increase prices. Also usually, as soon as such an offer appears on the market, they immediately buy it, so here it is necessary to constantly monitor the market in search of a good deal.
Property sale from the developer
There are situations, especially during a crisis, when the developer urgently needs money to pay off debts, continue construction, or for other urgent purposes. But sales are sluggish. In this case, the construction company can start selling their lots at substantial discounts, which gives the investor a good point to enter the market.
Apartments sold by the bank
When a person who has taken a mortgage cannot manage to repay a loan and goes bankrupt, the bank gets a collateral apartment, but the real estate market is not relevant for the banking sector. Therefore, when a bank receives such an unusual asset, the main objective is the quick sale of such property. Because of this, bankers are ready to give a good discount on such real estate. The discount can reach 15 percent. This type of transaction is quite safe, as real estate goes through strict banking checks.
Most of the players in the mortgage housing market have their own database of mortgage housing, and credit institutions can place ads on open Internet sites.
Buying apartments for repair
A good way to make money is to buy an apartment for repair and then sell it at a higher price. Discounts for heavily worn apartments usually start at 10 percent. In this case, it is important not to overdo it with the repair and maintain it in a minimalist style, since the author's repair may not be to everyone's taste.
This type of transaction is a rather complicated and multitasking process, before buying such a property you need to carefully calculate everything, since it is not always possible to recoup the repair. Also, if you decide to engage in this type of business, it is advisable to have your own team of craftsmen for the repair, as attracting outside companies can entail additional costs and difficulties.
The purchase of residential and commercial real estate at auctions that deal with bankruptcies and the sale of real estate for legal entities and individuals. At such sales, you can buy objects at a significant discount.
1. Is it worth investing in real estate - the pros and cons
Questions of profitable investments interest every rational person. How to prevent inflation from “eating up” our savings? How to make capital work and bring constant dividends?
The answer is simple - you need to invest in long-term and promising investment instruments. One such tool is real estate.
Everyone needs a roof over their heads. As long as human civilization exists, its representatives will need housing. Therefore, apartments and houses will always be a reliable investment option.
Deposits in real estate are a full-fledged type of business. For investments in housing, it is not even necessary to have large capital, since you can invest at the construction stage or, say, acquire a share in a housing cooperative.
The benefits of investing in real estate include:
- high liquidity of facilities
- profitability in the long run (renting housing, you can earn on it for years and decades),
- relative availability of deposits,
- a large selection of investment areas (residential and commercial real estate, buildings at the stage of the pit and the "first floor", suburban cottages, luxury housing).
Like any other financial transactions, the type of investments we are considering is subject to certain risks.
Cons of housing contributions:
- dependence of demand for objects on the general economic situation in the country and in a particular region,
- the high cost of real estate,
- low demand for housing in small towns,
- associated costs - taxes, payment of utilities, decoration and repair.
There are other nuances: prices for specific apartments often change due to unpredictable factors.
You bought a house in a relatively prestigious area for resale, and not far from the house a few years later built a factory (meat processing plant, factory) or built a busy highway. The cost of such an object inevitably decreases, investors lose part of their savings.
Choosing options for investing in real estate, you should carry out preliminary work and find out all the related factors and circumstances.
For details on competent financial investments, read the article “What is a profitable investment in the Russian Federation”.
We will not consider classic schemes that allow you to correctly buy a profitable property at an affordable price. Also, there will not be considered the special how to invest in real estate in Russia and abroad. This is a very important material requiring detailed study. We will publish it separately under the heading “Real Estate”. In order not to miss the necessary article, subscribe to the newsletter or join our group in social networks.
Features of buying real estate without capital
Remember three simple principles on the basis of which all your future transactions will be based.
- Absolutely everyone can profitably invest in real estate from scratch, without a budget and special knowledge.
- With a small capital, you will have to devote a lot of time to two processes: finding profitable objects and attracting enough money.
- To conduct transactions without start-up capital, you will have to learn to negotiate and get used to numerous rejections.
In the investment world, there are such concepts as resources and resources.
|Scheme of buying an apartment using resources||Scheme of buying an apartment using resource|
|You find a profitable property|
|Accumulate the right amount of money to buy it||Attract the right amount of other people's money to buy your own property|
|Get real estate ownership |
As you can see, all budgetless investment is built on the ability to extract the necessary resources. In the next section, we will look at a few examples that will help to better understand the essence of this approach.
Real estate buying schemes without capital
Below is a series of training video materials that talk about possible options for buying real estate without capital. Each video will be supplemented with textual abstracts, so you can quickly find and study the appropriate algorithm.
Buying a home on a mortgage, followed by tenants
|Buying an apartment with little capital||Buying an apartment without money|
|You find an investment object|
|Make a down payment of 10% of the value of the property and arrange a mortgage for 15-20 years||Take a consumer loan for 5-6 years, the amount of which is 10% of the value of the selected property|
|Get a mortgage for 15-20 years|
|Calculate the amount of required monthly payment|
|Calculate an acceptable rental amount. This amount should: pay off the amount of the mandatory monthly mortgage payment and generate additional profit|
|Find tenants and wait for the property to become your property|
Artificial overstatement with subsequent registration of a mortgage loan
- You find the object and agree on the cost.
- Ask the apartment owner to intentionally raise the price by 10%.
- Issue a receipt in which it will be said that the owner of the property will already receive from you 10% of its value.
- You send documents to the bank and without the down payment you get the required amount of money.
- Do redevelopment and break the apartment into several rooms, each of which will be rented out.
Loan from friends and payment of installment debt
- Find a suitable property.
- Borrow money from acquaintances and agree on repayment of debt by installments.
- Make a purchase.
- Rent an apartment.
- Gradually repay the debt.
Division of a large studio apartment with subsequent retail sale of each object
- You find the owner of a large apartment who wants to sell it at a market price.
- Find a few buyers who want to buy their home, but because of financial difficulties, can not buy a full apartment.
- Share a large studio apartment.
- Sell each studio separately.
- As a result, the property owner receives the desired amount of money, and you take the entire balance.
Connection to an investor's bargain
- You find a suitable object.
- Reduce its cost by 30%.
- Attract an investor and make a purchase for his money.
- Transfer the property for rent and divide the resulting passive stream in half.
Investment risks associated with the purchase of real estate without a budget
The entire credit period, you will be credited with the debt, which in the event of any force majeure circumstances may increase dramatically. Moreover, if you do not find tenants and cannot make payments on time, the bank may seize your incompletely purchased apartment.
In this video, the calculation of the cost of a mortgage apartment
Learn from the mistakes of others and approach each transaction with maximum responsibility.
Video about why it is very important to listen and hear on the deal
Absolutely everyone can invest in real estate without money and special education. To do this, you need to become a resource investor, evaluate all the associated risks, choose the appropriate work scheme and spend time on its implementation.
- Read the article: “Ken McElroy, The ABC of Real Estate Investing - A Brief Review of the Book.”
- Check out the publication “Free and Paid Real Estate Investing Courses for Beginners.”
- Go to the site "Investment Territory" and select the appropriate educational program.
- Engage in training and at the same time look for a profitable object for the transaction.
- Make your first investment purchase and share your success story in the comments.
Thanks for reading. Subscribe to updates and share useful publications on social networks.
Regards, Artyom Bilenko Blog Team
«Your line of life is in your hands»
4. How to buy real estate cheaply - tips for a novice investor
With a successful scenario, you can save 40% of the cost of the apartment, which will then be returned to you in the form of profit from the subsequent sale of the property.
The purchase at the construction stage has already been mentioned. Acquiring “unfinished” is profitable and cost-effective, but risky. Construction is not always completed on schedule. It even happens that it never downloads at all.
In every big city, from time to time, committees of “deceived investors” appear - people who have invested in real estate and are left with nothing. To sue a construction company is not the most enviable prospect.
Read the detailed material on this topic - “Investments in construction”.
Another way to save money is to buy an apartment without repair, make it at your own expense and sell the property at a price that covers your costs. Depending on the quality of consumables and the level of finish, the difference in cost can be 10-20%.
Advanced investors know even more radical ways to save. For example, they buy confiscated property, which is sold at public auction.
Real estate, which is put up for auction during the bankruptcy of individuals and companies, is often sold at a reduced price, since the evaluation of such objects is not always carried out by professionals.
Banks periodically put up for sale mortgaged property, which was seized from mortgage defaulters or lenders who took a loan for their apartments and did not repay it. Here you can also find profitable options.
There are special sites on which fresh lots are published with mortgaged and confiscated apartments for sale. Information is also available in the Unified Register of the Russian Federation on bankruptcy of legal entities.
1) We arrange a loan or borrow from friends
The most obvious option is to take a targeted home loan. Some financial companies willingly subsidize novice investors.
True, any loan needs to pay interest, so any operations associated with raising third-party funds require careful calculation. The income from the enterprise should cover debts, in addition, the terms of the loan should be taken into account.
Wealthy friends and relatives, if any, can borrow money without interest.
3) Choose a competent investment strategy
A competent plan is the key to success. If you feel an acute shortage of your own knowledge in matters of effective investment, contact professionals.
I recommend the project “Investment Territory”. The organization is an Investors Club, which conducts courses and training seminars for those who are interested in private investments. Particular attention is paid to real estate investing.
The lessons are taught by professional investors and businessmen. Thematic areas - investment strategies, quick start with minimal investment, investment in residential and commercial real estate, hostels, rent and sublease.
7. We invest in real estate with professionals
Professional support costs money, but in the end it can increase your profits by an order of magnitude. If you want to reduce risks and increase profitability, work with experts in the field of real estate investments.
We recommend choosing one of the three Russian companies in this area.
Activo - access to the most liquid real estate. Safe and autonomous form of collective ownership. Investments with a guaranteed profit ratio of 11.6% for investments from 2 million rubles.
You are buying real estate, and experienced managers will take over the management for the purpose of further implementation. The company provides customers with monthly reporting and is fully responsible for the capital contributed.
E3Investment - Long-term and highly profitable deposits in various types of real estate. The company provides investors with the opportunity to start with minimal deposits for the housing market (from 100,000 rubles). The site has a calculator that allows you to immediately calculate the possible profits of investors. Deposits are characterized by a high degree of reliability - for each asset there are 3 types of insurance.
GordonRock - an international real estate agency. A full range of services for investors in commercial, hotel and residential real estate abroad. The acquisition of mini-hotels, cafes, restaurants, hotel rooms, medical facilities and real estate for senior citizens. Deposits in the finished business in the UK, Germany, Spain, USA. Consultations and seminars on profitable investment.
Watch a useful video on real estate investment.
To summarize. Deposits in residential and commercial properties - a promising investment tool that will provide you with long-term passive income.
No matter what the size of your capital, modern investment mechanisms allow you to start with minimal investment. But remember that fluctuations in real estate prices directly depend on the economic situation in the country.
The HeatherBober project wishes its readers success in their commercial endeavors. We are waiting for ratings, comments and comments on the topic of publication. See you soon!
1. Why is investing in real estate - is it profitable?
Investing in real estate is one of the most profitable and stable investments to date. Real estate is a long term perspective.
By investing in commercial or residential real estate, you at least - save from inflation, and as a maximum - increase your capital.
Real estate has always been one of the most liquid assets. Apartments, houses, land have always been in demand in the market. After all, every day a new family is formed, which simply needs a roof over its head.
For investing in real estate not necessary immediately possess a large amount of cash. You can join HBC (Housing - building society), or invest in small housing.
There are 2 options for generating income from acquired property:
- Long-term asset: bought an apartment, rented it and increase your capital,
- Short-term asset: купил квартиру на стадии строительства, а после сдачи дома ее ликвидность выросла и продажа приносит доход.
Недвижимое имущество в маленьких поселках и деревнях будет менее ликвидным, чем в больших городах. Но, соответственно, оно и стоит на порядок дешевле.
Не стоит забывать и о расходах на содержание данного актива:
- капитальный ремонт,
- регулярный косметический ремонт,
- correction of breakdowns as necessary,
- monthly utility bills and more.
We also recommend reading our article - "Where to invest money".
Type 1. Living quarters
Consider a specific example of investing in an apartment.
When choosing a property, you should definitely pay attention to the following indicators:
- the area in which it is located
- transport accessibility
- internal infrastructure (courtyards, parking lots, kindergartens, schools, shops etc.),
- the internal condition of the apartment and the house as a whole.
Type 2. Commercial premises
Commercial real estate investments are more profitable since it costs more in the housing market.
Worth considering! Even a small office or retail space can cost an order of magnitude higher than a residential apartment in the same area. However and rent for commercial premises will be many times higher than ⇑ rent of a residential apartment.
Commercial real estate is best suited for long-term investment in order to obtain rent.
Type 4. Objects abroad
Profitable real estate investment in 2017 year include investments in foreign facilities. As an asset, this is a very promising investment, especially if you often travel to this country. Like us, the cost of housing in other countries rarely drops.
Buying property abroad should be extremely careful, you can not do without the help of an intermediary, and this is an additional cost.
IMPORTANT! First of all, consider the countries where you can get citizenship or residenceotherwise this attachment does not make sense.
Upon a change of power or a coup, the state may deprive the non-citizen of the right to own property and take it away in favor of the state.
In general, this is a very interesting and promising investment.
Step 1. Collect start-up capital
You need free cash to invest.
If you are limited in finances, consider the following options:
- buy a room to resell it for more or rent it out,
- enter into shared construction,
- take an apartment in a mortgage.
The last option will dwell in more detail. Let's say you have a certain amount and you would like to buy an apartment to rent it out, but there is not enough money to buy it. In this case, you can use savings as an initial fee.
Now mortgage lending has become more than affordable for almost everyone, and monthly interest repayment, as a rule, is fully covered by rent.
Step 2. Market Monitoring
Having determined the method of acquiring housing, start exploring the real estate market. This may take a long time, but don't rush . Carefully choose ads, pay attention to the duration of the sale of an apartment in a particular area.
Sometimes advantageous offers appear on the market and are quickly sold out. This is mainly moving to other cities, people often reduce the cost for urgent sales and leave a maximum of property. Therefore, you need to check the market regularly.
Step 3. Execution of the transaction
You can make a deal yourself or attract a lawyer.
Now in our state, most of the transactions take place first notarization and only then it is registered in Unified State Register of Rights to Real Estate (Unified Register of Enterprises).
With such a transaction, the assistance of a lawyer may not be necessary, because the notary public himself prepares a contract of sale and checks the purity of the transaction.
If you buy an apartment using mortgage funds then bank checks its cleanliness, and Insurance Company guarantees to cover almost all risks. Therefore, even if you are investing money in real estate for the first time, do not rush to attract intermediaries, because these are additional costs.
If you plan to purchase an apartment with its further resale then remember about tax deductions. Selling an apartment during 3 years (amendments are now being made to change this period from 3years before 5) after the purchase, you must pay income tax.
4. How to increase return on investment in real estate - TOP-5 effective ways
In order to get a big profit from investing in real estate, you need to buy it as cheaply as possible.
To increase profits, you can use various methods:
- Explore a developer offering cheap apartments under construction, carefully evaluate its reliability. After all, there are cases of freezing a house’s construction, if the construction company is declared bankrupt,
- You can also buy an apartment in poor condition and make repairs in it.The difference between the purchase and sale prices of real estate in this case may be from 10 % before 25 % depending on the costs
- The cost of housing can be increased by competent redevelopment. Choosing a similar investment in real estate in Russia, don't forget permission from the BTI, as some types of redevelopment are prohibited, eg , demolition of supporting structures. Before re-planning, be sure to consult with a specialist and get permission from the relevant authority,
- Banks sell at the auction apartments of debtors in order to repay their loan. Usually the condition of such housing is unsatisfactory, but its cost is lower than in the market from 10% before 40% When the bank takes the apartment as a deposit, it makes an assessment report, and makes a discount on the value in the report. Therefore, an apartment sold at auction will certainly be cheaper ,
- You can increase the value and liquidity of real estate by transferring it from residential to non-residential, especially if the apartment, located on the ground floor, is in a house with high traffic or on the "red line". This is a long process. You will need a separate entrance (additional costs), but when renting out an office space, you will compensate for all expenses. It’s worth considering that the apartment should not be pledged by the bank, since he will not give consent to change the category of real estate. You won’t be able to do this and with an apartment bought in a mortgage.
Often there are cases when an apartment is sold with registered people, whom the new owner subsequently writes out through the court on his own. This is a rather lengthy, costly and nervous procedure.
Therefore, the presence of residents registered in the apartment should be checked before buying it. Also pay attention to utility bills. After all, the debt of the old bankrupt owner passes to the new owner.
We also recommend that you familiarize yourself with our detailed material - "Where to invest money this year to earn money."
5. Who can help in investing in residential or commercial real estate - an overview of 3 companies
You can invest money in real estate on your own or turn to specialists in this field. Now there are many companies that offer their services in the investment real estate market.
You buy an apartment and register it as your property, and the company is engaged in its further implementation. For example, company Activo, offers its services and guarantees profit from 11% per annum (which is higher than any contribution to a reliable bank), plus you still have a liquid asset in the form of real estate or cash from its sale.
By transferring your asset to trust, you receive monthly funds in an account with full reporting of actions. Very convenient, isn't it?
With foreign real estate, we strongly recommend that you do just that. To do this, you can contact an international company Gordon rock .
If you do not yet have sufficient funds to purchase a full-fledged property, but decided to invest in it, we recommend contacting the company E3 Investment . This company has long been on the market and offers its investors to start investing in real estate from 100 000 rubles.
Choosing a company or investing is up to you.
6. Conclusion + video
Summing up all of the above, we can conclude that investing in real estate is very promising. This type of investment can provide you with a stable passive income.
You can start investing in real estate with the minimum free capital on hand, and increase it if you manage it correctly.
In conclusion, we also advise you to watch an overview video about investing - how and where to start a beginner:
That’s all with us. The Biznesmenam.com team wishes everyone success and profitable investment!
P.S. If you liked the material, then share it on social networks and do not forget to leave your comments below.
The author of the financial journal Businessmen.com, a former leader of a well-known smm agency. The present is a coach, Internet entrepreneur and marketer, investor. I tell you: how to effectively manage personal finances, it is profitable to increase them and earn more.
On the pages of the site you will find a lot of useful information for yourself.