Most potential investors are considering this feature . He seems tempting and accessible to them. A high constant income is drawn in my thoughts, but what about? “Yes, there are not any costs, apart from the acquisition ,” they think. After all, the burden of paying for communal services falls on the tenants of such apartments. And you recognize yourself, come for a profit once a month. In fact, the image could also be completely different. Considering residential land for investment, it’ll be most practical to separate the concepts of primary and secondary housing. Each of them has its own characteristics when buying, selling. Demand for these sorts of housing is different, respectively, and liquidity is additionally different.
Advantages of investing in housing within the secondary market:
you get an apartment ready for further actions, with decoration and other things;
you can rent the apartment. Tenants can pay most of the prices related to maintaining the apartment;
The apartment are often sold quickly and profitably if necessary. And you’ll almost certainly get on the plus side of what you spent on your purchase;
You can make a tax refund of a part of the quantity spent, which may even be a pleasant bonus to income.
Cons of investing in finished housing:
the market is oversaturated, it’s tough to seek out tenants;
finding solvent tenants is even more difficult;
For renting out housing, you would like to get furniture and household appliances;
tenants can damage the interior arrangement of the apartment, and again they’re going to need to make repairs or buy furniture;
many people like better to buy new apartments;
due to external factors and therefore the abundance of latest buildings, the value of housing on the secondary market may fall significantly over the years;
if you are doing not decide to hire out the purchased apartment, then you’ll need to pay taxes, fees and utility bills yourself. However, you’ll pay land tax in any case, no matter the presence or absence of tenants.
When it involves housing within the primary market, you’ll choose different strategies for investing in it. one among them is that the purchase of housing at the stage of the inspiration pit. a really profitable, but at an equivalent time very risky investment. It all depends on the great faith of the developer.
The second option is to conclude an agreement on equity participation within the construction and buy an apartment during a building with a high degree of readiness. These investments differ from buying at the excavation stage. Some risks increase, some, on the contrary, go away.
Pros of shopping for a range in a replacement building:
when buying an apartment during a house with a high degree of readiness, there are more chances to attend for the soon completion of construction and putting the house into operation;
an apartment will cost a touch but an identical one in houses that have already been leased, but costlier than people who haven’t yet been built.
Cons of shopping for a range in a replacement building :
there are risks of problems for the developer and delay within the completion of construction;
if you purchased an apartment from a developer for the aim of resale within the future, the status of the housing will change from “primary” to “secondary”. and lots of are striving to shop for housing within the primary market, since this procedure provides for a preferential mortgage and therefore the possibility of obtaining a tax write-off for home decoration. Accordingly, the circle of potential buyers are going to be significantly narrower.
In order to profit from the purchased apartment, it’s worth examining a number of the accompanying conditions before buying.