4 ways to make money on real estate
Money (or real estate) can be "made to work" and generate income. Tools that allow you to make money on your capital or property have long been known. But not all and not all.
Transfer the property for management
Money can be transferred to someone: invest in a bank, buy securities, buy gold, etc. Property can also be transferred to management.
If you do everything right, you will probably be able to get income. But now there is a crisis in the yard. Before the crisis, everything was growing and any investments in existing instruments brought income over time. Now, alas, the market is falling. And giving money to a fund, bank or broker, you can only hope that you made the right choice.
Buy property and rent it out
You can organize passive income yourself. Buy real estate property and rent it out. The profitability may not be prohibitive, but it is still 2 times higher than bank deposits.
For example, you buy an inexpensive 1-room apartment for 6.5 million and rent it out for 28 thousand rubles a month. From this amount you pay a communal apartment = 3 thousand per month. There remains 25 thousand a month, for a year it turns out 25 * 12 = 300 thousand rubles. That is, the yield (excluding taxes) will be 4.6% per annum. It turns out that the profitability of long-term renting of an apartment is slightly higher than the current profitability on bank deposits.
Buy and rent commercial property
If you buy commercial real estate and rent it out, the profitability will be 2 times higher than when you rent out residential real estate.
Offers on the market are represented by the sale of premises that can be bought and rented out or by the offers of the SAB (ready-made rental business).
For a long time, real estate has been one of the most reliable ways to preserve finances. Such a guarantee cannot be expected from money, gold, or precious stones. Jewelry and precious metals are movable property and can be lost quite easily, and cash is subject to inflation and is affected by monetary reforms. Housing, however, always remains in price. 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. You can invest in residential properties 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 a resale object is quoted less due to the high cost of a housing unit, but it is also quite in demand.
Not all of these methods are available to everyone. Buying housing or renting a commercial fund requires an investment of very, very large 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, making money 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 risk of a business in this area is the lack of quick payback and the potential losses in this regard. The most popular type of such investment is the purchase of a home (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, in contrast to the housing boom of the early 2021s.
Buying housing in the face of growing demand for it guarantees multiple earnings when it is resold. This especially applies to those who have managed to invest in this area of free finance in the last decades of the last century. After 10-15 years, the profit in such transactions was tenfold.
These days, such an effect is no longer to 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 downward phase. Only affordable housing objects are growing significantly. 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 housing") will not give such an effect. The cheapest will be to buy in a house at the excavation stage. 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 profit figure that investors can count on as quite realistic.
Real estate, as you know, is the most profitable investment of money, and it is also the best option for increasing your capital. Renting out premises, garages, summer cottages, apartments for rent is a source of income that brings a good profit. Opening a real estate agency, a hotel business, these are options for creating your own business related to real estate. A competent approach to business organization contributes to survival in the face of huge competition that exists in every industry where big money is "spinning". Business ideas with real estate also require a lot of capital for circulation, although there are exceptions.
Business ideas with real estate - buying, selling, renting housing, office or warehouse per year.
According to the results of last year, announced at the forum "Real Estate Market Results 2021", there was a tendency for the real estate market to improve from crisis to crisis. According to experts, including Andrei Voskresensky, the crisis to some extent has a beneficial effect on the real estate market in Russia. Thus, economic instability filters out projects that were initially poorly thought out, and leaves on the market only those players who took care of the quality of their initiatives. Competition is getting tougher during the crisis, and the market is clearing itself of unscrupulous developers.
In 2021, more apartments were commissioned than in 2021. In percentage terms, these figures were an increase of 8.2 percent. During the crisis, developers have decided to design and equip compact housing, which greatly lightens the burden on the buyer. The insurance procedure for equity participation agreements has become one of the planned reforms of 214-FZ. The reform comes at a very difficult time, while the average salary of a Russian citizen has reduced his purchasing power by 20 percent compared to 2021. The gap between salary and ability. to acquire something, will increase - experts are sure.
Reform 214-FZ will continue taking into account the conditions dictated by the market and the financial situation of citizens. At the business meeting, proposals were put forward to reduce mortgage rates, which, in turn, will increase the inflow of loans by the population.
Reducing mortgage rates can reduce the amount of the mandatory monthly payment to 15,000 rubles. In addition, subsidizing mortgages will help people who cannot collect the down payment for the purchase of housing.
However, such proposals are still under consideration. The real estate market, according to experts, is now at the peak of its popularity with the consumer. Housing prices are now the same as 10 years ago. The low price has an extremely positive effect on the level of sales. Experts also note that large cities - regional centers are the most attractive for investors.
The negative trend that marked the crisis was the movement of developers from this area to other market niches. For example, Vedis Group is actively selling its own assets, and the owner of the company plans to invest in large art projects. Expert Alexander Khrustalev also notes that small businesses are disappearing at a catastrophic rate - 2021 was the last year of operation for more than 400,000 small businesses. This figure is up to 18 percent of the total number of buyers.
Participants in the real estate market are extremely cautious in making plans for the near future. The authorities have confirmed the fact that the fight against the creation of projects for development will continue. It is worth noting that the time for obtaining permits has been greatly reduced, but many developers are in favor of speeding up this procedure at least twice.
The head of the AHML emphasizes that developers will be given the opportunity to work with land plots that are in federal ownership and use them for further development. The real estate market is directly and indirectly affected by oil prices - for example, if the price of a barrel of "black gold" returns to the level of forty dollars, prices will rise up, and the market will develop at an accelerated pace. Today's realities are such that developers are working on minimal margins, improving business strategies and developing new plans to fight for the buyer. This has largely helped to refresh the real estate market in recent years.
The real estate industry allows you to work in several directions that will be beneficial to the entrepreneur. To promote any type of business, there are a lot of services, portals and mobile applications - with their help, any field of business becomes more known to the consumer.
Websites for promoting real estate business
Own business is a dream of many, as they believe that it is a good way to make money, independence from the authorities and control over everything that happens. One of the most popular and easily implemented options is the real estate business.
Risk Assessment in Real Estate Business
Before making money on real estate, you should consider all the economic indicators and think about the risks. As a rule, it is unforeseen circumstances that can destroy a business or significantly undermine its well-being. Experienced entrepreneurs pay attention to the following threats when drawing up a plan:
- Economic. These risks are associated, first of all, with the rise in prices for decorative items and furniture. If the property is damaged by the guests, then the owner will have to pay for the replacement, since the fine usually does not exceed 50% of the value of the goods.
- Legal. Indeed, the cost of processing a package of papers can cost a large amount, so you should consult in advance and inquire about prices.
- Architectural and construction. The risk is borne only by the structure itself, that is, the building. If any deformation occurs, then the room will need to be urgently restored.
- Administrative. Penalties for misconduct based on violations of SanPin and other regulations.
Opportunity to run a real estate business without start-up capital
Earning money on real estate is also available for start-up entrepreneurs who do not have start-up capital. As a first step, you need to find a room, which can be:
- Private garage.
- Own apartment.
Next, the first capital is earned, based on the rental value paid by the guests. Gradually, housing conditions should be improved and the price of living should be raised. After several months, it will already be possible to rent a room and open a real estate agency there.
Attention! If you do not want to wait for profit for several months, then you should consider the option of lending. For entrepreneurs, banks have special advantageous offers.
Best Real Estate Business Ideas
If you choose the right direction of business, then even a crisis will not be an obstacle to someone who wants to become a successful businessman. Which business idea to give preference to, which will be relevant in 2021? As always, experts call a real estate business a rather profitable and promising idea. At the same time, it is not necessary to engage in rental housing, there are other ways to earn decent money. Read about the options for earning money in real estate on the website crediti-bez-problem. u.
Making money on real estate sales
This is a rather specific type of income, since it will take some experience and at least minimal knowledge of the real estate market to minimize risks. But the income from it will be much higher than, for example, from renting an apartment. An important condition is also the availability of start-up capital. What is it for?
The essence of the business is the acquisition of real estate objects for major repairs or reconstruction. The more investments are required for repairs, the cheaper square meters will cost. Naturally, after the arrangement of housing, its value increases, you can sell the property with a profit.
The difference in the purchase and sale of an apartment, minus the funds invested in repairs, will be the entrepreneur's earnings. Most often, income from the sale of real estate is 800,0001,200,000 rubles.
What risks are there in this business?
Investing in real estate
Such a business is attractive because by purchasing square meters in a new building at the initial stage of construction (from a foundation pit), you can make good money after the house is delivered.
The difference between buying and selling can be:
- In the condition of the apartment from the builders - up to 600,000-900,000 rubles.
- Sale of a renovated apartment in a rented house - from 1,200,000 to 2,000,000 rubles.
What to watch out for when buying a home in a new building?
Cooperation with unverified developers. In practice, it happens that one and the same apartment is sold to different buyers, the house is not accepted on the balance sheet of the city, or even the construction is “frozen”.)
Opening a real estate agency