Which apartment to buy for investment: criteria that it is important to pay attention to for a profitable investment
Investments in apartments, as well as in real estate in general, are one of the most promising areas. And there are many arguments in favor of this thesis. Firstly, the price of square meters is growing, which means that a private investor can make money on the difference in cost. Secondly, housing, especially in such large cities as Moscow, St. Petersburg, Krasnodar, Sochi, is in demand among tenants, and this is already a stable additional income.
Robert Kiyosaki talks about investing in real estate as a long-term strategy with minimal risks. At the same time, he does not exclude the possibility of investing due to leverage, the main thing is to understand which apartment is better to buy for investment.
Investing in apartments is profitable: 6 practical tips for choosing assets
The relevance of this method of saving and multiplying funds does not decrease over the years, therefore, in 2022 this option can be considered by investors with different levels of capital.
Today there are 2 main ways to invest in residential real estate: rent and resale. At the same time, the investor can invest independently or entrust his funds to an investment fund. Let’s focus on the first option and consider the most important criteria that will help you understand which apartment to buy for investment.
Market and price analysis
It is impossible to rely on intuition or the advice of friends in such matters. If you intend to invest money in the purchase of promising residential real estate, first you need to get as much information about the developer and the object being built by him. I must say that new buildings are still preferable to secondary housing. This segment is now developing rapidly and is supported by the state.
Specialized forums, telegram channels and specialized websites help to analyze the situation on the real estate market. On such resources, you can not only get interesting information, but also ask specific questions. Each region has its own forums, the participants of which intend to purchase real estate or have already purchased. For example, investors use the Domkad forum to get information about Moscow real estate. There are groups in social networks and forums of residents of individual complexes, where you can get information, as they say, firsthand.
Analysis of the dynamics of real estate prices when investing in apartments is no less important, as it helps to determine the feasibility of investing funds at the moment. However, one nuance needs to be taken into account here: realtors and developers often artificially inflate the cost of square meters.
Area and transport accessibility
Choosing an apartment as an investment, you need to think not only about the price, but about potential buyers or tenants. In megacities, this factor is especially important, because people need to get to work, take their children to kindergarten or school, and seek help from a polyclinic. Even if you intend to purchase an apartment at the excavation stage, you need to ask how developed the infrastructure in this area is and what is the transport accessibility.
For example, apartments in houses located close to the metro will be more expensive than those that need to be reached by bus. Everything is important here: from the distance to the nearest bus stop and the city center to the traffic schedule. Sometimes the area of construction of a new complex is not too attractive and is located far from the center, but in the future a new highway or metro line will be built in this area. This nuance can be considered a plus. But finding a house in or near the industrial zone will be a minus. Few people will want to buy or rent housing in a place where there is practically no green zone, and the air is saturated with industrial waste.
Apartment type and housing class
Currently, it is customary to allocate several classes of housing, which is important when investing:
- the standard formerly known as “economy”;
- comfort is the same as the previous version, but in a better performance;
- business – luxury housing at affordable prices;
- elite is the most comfortable and expensive housing.
Accordingly, depending on the class, the cost of the purchased object will also vary, and hence the amount of investment. The type of future apartment determines the number of living spaces. The most popular are 1 and 2-room apartments, which are suitable for people who do not have their own family and small families, for example, consisting of parents and a child. Multi-room apartments are mostly designed for couples with two or more children. By the way, it is safer to rent housing to married couples. At the same time, singles have more free funds.
If we talk about the return on investment in apartments, it will depend on the type of real estate and the method of investment (resale or rent). So, a middle-class object can pay off in 10-15 years when rented out. If you resell a similar object, return the money and multiply the initial amount as quickly as possible, in about 3-5 years.
Location of the apartment
In this case, the number of floors and the location of the apartment are assumed. High-rise buildings are now less in demand than low-rise buildings, so when choosing an investment object, you should pay attention to residential complexes consisting of 4-5-storey buildings. Such complexes create a comfortable and safe environment for living with a low load on the infrastructure.
Now about the location. Traditionally, buyers prefer middle floors and not corner apartments. Remember! The first floor is a little light, especially if there are lush green spaces under the windows. Upper floors are a problem in the absence of an elevator, especially if there are small children in the family.
The advantage of a modern layout is the rational use of space. Sometimes a one-room apartment in a new house wins in comparison with a two-room apartment of the old model.
The level of comfort directly depends on the layout. When choosing an apartment as an investment, it is better to give preference to the European format, which involves combining the space of the kitchen and living room. But apartments with a lot of unused space, it is better not to consider, for example, apartments with long narrow corridors.
Apartments with terraces in low-rise buildings are also attractive to buyers. It is better not to buy residential premises with attics on the contrary, since not every buyer or tenant will like a beveled ceiling.
Real estate liquidity
The concept of residential real estate liquidity implies the possibility of quick payback and high profitability, which is primarily due to the demand for certain types of residential premises. As mentioned above, 1 and 2-room apartments are more in demand in Russia. They are attractive both for buyers and tenants, for whom the cost of rent prevails over the area.
But not only the type of housing determines its liquidity. Much depends on the region of purchase and destination. So, for example, if an investor is betting on a studio apartment, it is important that the room is spacious, has more windows or one, but panoramic and an area of at least 18 square meters. meters.
If the choice fell on a one-room apartment, it is better if it will be a “one-bedroom shirt” format, in which the kitchen windows overlook the street, and the bedroom windows overlook the courtyard. Among two-room apartments, apartments with a spacious combined kitchen-living room, small bedrooms and two bathrooms have more liquidity.
Pay attention! In small cities, the criteria differ from those in the capital. And the winner will be a completely different housing. And besides, the demand for real estate in different regions may differ.
Possible risks of investing in apartments
These are present in any field of investment. Therefore, before investing in real estate, it is important to analyze the feasibility of such a method of investment in your region, to study the dynamics of demand and prices, to assess the prospects for the development of infrastructure and transport in the construction area.
In the end, everyone decides for himself: choose a time-tested developer or take a risk and buy a house from a beginner. Buying apartments from the latter often brings more income, but is associated with high risks. Sometimes developers with zero reputation deliberately lower prices, trying to gain a foothold in the market and push competitors. You can buy an apartment from such a developer, but you need to act thoughtfully.
Published: 6 April, 2022