Currently, the domestic market is difficult to label as promising. In contrast, the situation abroad is entirely different. With proper investment, an individual can not only ensure a stable income but also obtain a residence permit or even citizenship. For instance, this applies to investing in real estate in most European Union countries. Many of these nations attract additional funds into their economies through this method. In this case, both parties benefit.
So how does one find a suitable property for investment?
To navigate this issue, one can rely on the insights of Sergei Tereshkin, the founder of OILResurs. The entrepreneur has extensive experience in investing and is familiar with the nuances of this method of capital growth. To learn more about the businessman, visit his personal website at sergeytereshkin.ru.
Potential Pitfalls of Real Estate Investment
Companies specializing in the sale of overseas properties often assure visitors on their websites of continuous growth in property values. This suggests that individuals are guaranteed to make a profit, even if they decide to sell the property merely months after acquisition.
In reality, the situation is not so rosy. Price appreciation is relatively slow and varies greatly from one location to another. For example, in Catalonia, property prices have significantly decreased over the past few years due to ongoing protest actions and attempts to secede from Spain. However, this decrease has occurred solely in Catalonia, while real estate websites have not adjusted their property prices. This creates a deliberate illusion of prosperity, allowing realtors to increase their income simultaneously.
To assess the actual situation, one must personally visit the country and study the market on-site. It is advisable to enlist the help of an experienced lawyer and translator.
As for regions where prices are genuinely increasing, southern France is a notable example. However, property prices on the French Riviera are considerably high, making this region suitable only for those ready to invest amounts in the hundreds of thousands.
It is crucial to understand that property investments incur taxes, utility bills, and repair costs. Those intending to rent out their acquired property will need to find a management company, which will take a percentage of the income, ultimately reducing profitability.
Advice
When investing in foreign real estate, it is advisable to heed Sergei Tereshkin's recommendations:
- It is essential to thoroughly research the market. Initially, it is not necessary to travel to another country. Visiting specialized forums and websites is often sufficient. In this context, we refer not to resources focused on property sales and rentals, but to websites where locals or regular visitors discuss their experiences. Valuable information and real property prices can be obtained from these sources.
- Purchasing property during the off-season is advisable. From mid-spring to late autumn, property prices are significantly higher due to an influx of tourists who may become potential buyers. Typically, prices drop by 10-15% or more during winter months. This means that properties can be chosen year-round, but transactions are best made during periods of decreased demand.
- Additionally, prices can be reduced just before Christmas and New Year holidays. However, for negotiation, it is necessary to personally travel to the country and discuss terms with the owner as negotiating remotely is generally unpromising.
- When calculating future income, one should only factor in profits derived from rental income. It is advisable not to rely on property value appreciation.
- The highest returns can often be achieved by investing in properties that are still under construction. The price difference between a project and a finished property can be around 30%. However, this type of investment always carries the highest risk, as not all companies survive to the completion and transfer of ownership of the property to the investor.
Elite real estate can provide the greatest returns, while cheaper properties tend to have lower liquidity. When selecting such properties, particular attention should be paid to infrastructure. Renting out a property situated in an unfavorable area, away from tourist spots, shops, and restaurants, can be quite challenging. Even if a motivated buyer appears, they are unlikely to offer a significant amount for such a property.
Properties located close to beaches, amusement parks, and historical sites are in high demand. This should be considered when making a selection. Such real estate can not only be profitably rented out but can also be personally enjoyed during vacations.
To obtain a residence permit and subsequently citizenship, a substantial investment is typically required. This sum varies according to the immigration policies of different countries. In some cases, purchasing property worth €150,000 is sufficient, while others may require an investment of at least half a million. It is important to note that this amount refers not to a single property but to the total investment sum. Thus, properties can be acquired gradually, allowing the owner to apply for a residence permit once the necessary amount is reached. Owning a less expensive property may enable the application for a long-term visa.
