Hello, dear readers.
Today we have a very interesting topic. We will talk about how to invest in real estate with little or no starting capital.
The purpose of this article: to collect the maximum number of working schemes that allow, with due effort, to profitably buy a promising residential property and make money on the transaction.
We will not consider classical schemes that allow you to correctly buy a profitable property for reasonable price. Also, it will not discuss specifically how to invest in real estate in Russia and abroad. This is a very important material that requires detailed study. We will publish it separately in the “Real Estate” section. In order not to miss the right article, subscribe to the newsletter or join our group on social networks.
Features of buying real estate without capital
Remember three simple principles on which all your future transactions will be based.
- Absolutely anyone can invest profitably in real estate from scratch, without a budget or special knowledge.
- With little capital, you will have to devote a lot of time to two processes: searching for profitable properties and attracting a sufficient amount of money.
- To conduct transactions without starting capital, you will have to learn to negotiate and get used to numerous refusals.
In the investment world, there are such concepts as resources and resourcefulness.
As you can see, all no-budget investing is built on the ability to obtain the necessary resources. In the next section, we'll look at a few examples that will help you better understand this approach.
Schemes for purchasing real estate without capital
Below is a series of educational video materials telling about possible options purchasing real estate without capital. Each video will be supplemented with text abstracts, so you can quickly find and study the appropriate algorithm.
Purchasing housing with a mortgage and then attracting tenants
| Buying an apartment with small capital | Buying an apartment without money |
|---|---|
| You find an investment property | |
| Do you do an initial fee in the amount of 10% of the value of the property and take out a mortgage for 15-20 years | Take for 5-6 years consumer loan, the amount of which is equal to 10% of the value of the selected property |
| Apply for a mortgage for 15-20 years | |
| Calculate the amount of the required monthly payment | |
| Calculate an acceptable rental amount. This amount should: repay the required monthly mortgage payment and generate additional profit | |
| Find tenants and wait for the property to become your property completely | |
Artificially inflating the cost with subsequent registration of a mortgage loan
- You find an object and agree on a price.
- Ask the apartment owner to deliberately inflate the price by 10%.
- You issue a receipt stating that the owner of the property will already receive 10% of its value from you.
- You send the documents to the bank and receive the required amount of money without a down payment.
- You are remodeling and dividing the apartment into several rooms, each of which will be rented out.
Borrow from friends and pay off debt in installments
- Find the right property.
- You borrow money from friends and agree to repay the debt in installments.
- You make a purchase.
- You rent out an apartment.
- Gradually pay off your debt.
Division large apartment in the studio followed by retail sales each object
- You find the owner of a large apartment who wants to sell it at the market price.
- Find several buyers who want to buy their own home, but due to financial difficulties cannot buy a full-fledged apartment.
- Divide a large apartment into a studio.
- You sell each studio separately.
- As a result, the property owner receives the necessary monetary amount, and you take the entire balance.
Connecting to a profitable investor deal
- You find a suitable object.
- Reduce its cost by 30%.
- You attract an investor and make a purchase with his money.
- You rent out the property and divide the resulting passive flow in half.
Investment risks associated with purchasing real estate without a budget
All credit period You will have a debt, which in the event of any force majeure circumstance may increase sharply. Moreover, if you do not find tenants and cannot make timely payments, then the bank may seize your not fully purchased apartment.
This video calculates the cost of a mortgaged apartment.
Learn from the mistakes of others and approach every transaction with maximum responsibility
Video about why it is very important to listen and hear during a transaction
Summary
Absolutely anyone can invest in real estate without money or special education. To do this, you need to become a resource investor, assess all the associated risks, choose a suitable work scheme and spend time on its implementation.
What's next?
- Read the article: “The ABCs of Real Estate Investing by Ken McElroy - A Brief Review of the Book.”
- Check out the post “Free and Paid Real Estate Investing Courses for Beginners.”
- Go to the website " Investment territory» and select a suitable educational program.
- Get involved in training and at the same time look for a profitable deal.
- Make your first investment purchase and share your success story in the comments.
Thank you for reading. Subscribe to updates and share useful publications on social networks.
Sincerely, Artem Bilenko's blog team
« Your life line is in your hands»
- 1 1. Management of an apartment building
- 2 2. Subletting someone else’s house - income is twice as high rent
- 3 3. Hostel for the 2018 World Cup - income 10 thousand dollars per day
- 4 4. Anticafe - an atmospheric place for the soul
- 5 5. Free land for use and for sale
- 6 6. Business real estate - proper rental of an office center
- 7 7. How to find money for a real estate project and more
- 8 8. Investments in townhouses
- 9 9. Modular houses - affordable and always in demand
- 10 10. Apartment in Berlin - a super-reliable investment and monthly income
- 11 11. Sublease of an apartment - income without investment for active people
- 12 12. Rental business - hostel for workers
- 13 13. Home staging - we sell housing quickly and expensively
- 14 14. How to properly reduce the price of real estate
- 15 15. We turn an apartment into an office and increase profits
- 16 16. Purchase of bankrupt real estate for 5% of the cost
- 17 17. Business real estate - making money on shopping centers, offices, warehouses
- 18 18. Capsule hotel - the cheapest accommodation for visitors
- 19 19. Buying and selling real estate - making money on an early investment
- 20 20. Repair and refurbishment of summer houses - a million rubles per summer
- 21 21. Earning money without investment - sublease commercial real estate
As a business property, real estate is one of the most reliable areas; apartments, shopping and office centers are almost always in demand. But in the minds of the majority, making money in real estate is associated with large capital, due to the lack of which people do not even try to start such a business.
At the same time, many ways to earn income from your own or someone else’s real estate involve modest, or even zero, starting investments, you just need to know what and how to do.
1. Management of an apartment building
Many people invest their earnings in real estate, including apartment buildings whose apartments are rented out, but not everyone considers the rental business to be their main one. Therefore, the profession of managing one or more apartment buildings quite in demand.
You will post advertisements for vacant apartments, show them to potential tenants, collect money and maintain the operational condition of the house - electrical repairs, plumbing, etc. If you have the appropriate skills, you can do it yourself, or call a guest master.
Start-up capital- 0 rub. All that is required is a willingness to work. You can start working immediately.
Income from 30 to 100 thousand, but is determined by agreement with the owner and the size of the house. Usually something around 30% is taken care of. Considering that the house makes 100-300 thousand, the amount comes out to be very decent.
If you are seriously interested in making money in real estate, check out secrets of investing in apartment buildings. Learn about the implementation of various projects and key strategies for generating passive income in real estate.
2. Subletting someone else’s house - income is twice the rent
Often the owner of a large house with 5 or more rooms is looking for one tenant. And by becoming such a tenant, you will make good money by renting out separate rooms. As a result, you will not only recoup the rent, but also receive considerable income. And if the house is located near a train station or market, rooms can be rented out on a daily basis, increasing your income by 2-3 times.
You just need to choose a house in such an area, carry out repairs and competently conclude a lease agreement that allows you to move in third parties and does not allow the owner to take away the rental business you have established in a couple of months.
Start-up capital- payment for a month in advance plus a deposit, 50-100 thousand.
Implementation period- It will take from two weeks to a month to choose a promising sublease house. Another 2-3 months for repairs.
Income from a five-room house it will be in the range of 30-50 thousand for long-term rent and 100-150 thousand for daily rent. But usually options for houses from 12 rooms are considered.
3. Hostel for the 2018 World Cup - income 10 thousand dollars per day
The World Championship will allow many people to make money, and first of all, real estate owners. After all, hundreds of thousands of foreign fans will come to the country, and they need to be accommodated somewhere. And for poor fans, the best option is a hostel.
Anyone who is profitable or has several apartments can become one a private house. You just need to divide it into the maximum possible number of living areas, take double beds, plus make cosmetic repairs with football-like finishing. And then you are guaranteed maximum load during the championship.
Start-up capital- 100-200 thousand for repairs, if you already own suitable premises.
Implementation period- redevelopment finished house for a hostel it will take one to two weeks, but if you purchased a building that requires repairs, it may take 1.5-2 months.
Income will be 10-20 thousand dollars during the championship days, in the future it will bring 150-200 thousand on regular rent.
4. Anticafe - an atmospheric place for the soul
Regular cafes and restaurants make money by selling food and drinks at a high markup, but often what people really need is just a place to meet. And such a place is an anti-cafe, where people pay not for food, but for the time spent. Food can be sold for a fee, be free (in a limited assortment), and in some anti-cafes you are allowed to bring it with you.
The main thing in organizing a popular anti-cafe is a convenient location (attractions and cultural sites cities nearby is a big plus) and a friendly atmosphere. Then you are guaranteed visitors.
Start-up capital- 200-250 thousand for rent, decoration of the premises and furniture, but it can be done without investing your own funds.
Implementation period- searching for premises will take one to two weeks, repairs will take about a month.
Income- due to its specifics, the anti-cafe does not bring in excess profits, but with high popularity you can count on 100-150 thousand rubles per month.
5. Free land for use and sale
In our country there is a huge amount of land that has owners but is not used. There are many reasons - some do not know how to get income from it, some are lazy, some perceive work on the land as dirty and unprestigious.
And at the same time, there are people who are ready to properly use this land. Your task is to find both. You will offer the owner to buy the land at a price below the market price (he will almost certainly agree, because now this land does not bring him anything), and after delimitation you will sell part of the land to the buyer at its real price. Keep the other part for yourself.
Start-up capital- 5-10 thousand for land surveying.
Implementation period- searching for a suitable site, negotiations with the seller and buyer can take two to three months or more. Therefore, this strategy should be carried out in the background - wait, look for a suitable option.
Income. As a result of the transaction, you will receive a plot of land that you can use yourself or sell; the price can be in the millions.
6. Business real estate - proper rental of an office center
Office space is in demand, because someone is starting their own business, someone is looking for more spacious premises, someone has come to open their own branch in the city, etc. And although in general the rental business is simple, renting out commercial real estate has its own tricks that allow you to increase your income.
The main thing is the division of areas. Set aside 20 percent for elite offices with expensive finishes, which will charge the highest fees. 50% will be occupied by medium-sized offices, high-quality, but without luxury. The rest are small for beginning entrepreneurs. For them it is worth providing a set of inexpensive furniture. It is better to rent out luxury premises empty - successful companies have their own corporate style.
Start-up capital- purchasing or building an office center from scratch will cost 20 million or more.
Implementation period- selection and purchase of an office center will take 3-6 months, construction - a year or more.
Income depending on size and overall business activity in the city can vary widely - 1-10 million.
7. How to find money for a real estate project and more
As an investment, real estate is always attractive, and if you have a promising project, start looking for money for it. Tell all your relatives and friends, visit Internet sites dedicated to private investments, look for business angels investing in start-up risky projects. Finally, try to raise it yourself using crowdfunding.
And to increase the chances of success, work on the project, give more specifics. Not an oral history, but a beautiful presentation with numbers and graphs. The mandatory minimum is the amount of investment, operating costs, profit and payback of the project.
Start-up capital you may have any, or you may not have any at all, if you plan to make a project with 100% of the investor’s money.
Implementation period, the time it takes to find money will depend both on the volume of your efforts, as well as on your prospects and attractiveness.
Income depends on your idea. The main thing is that it must be accurately calculated before you start looking for an investor.
8. Investment in townhouses
Townhouses are two- to three-story houses for several families with separate entrances for each, at the same price, they are much more spacious than apartments in dense urban areas, but they are cheaper than a full-fledged personal cottage, and therefore they find their buyer. Building a townhouse is cheaper and takes less time than apartment house, and therefore attractive to average investors.
And in order to guarantee the sale or rent out of apartments, try to choose areas for construction closer to the city limits with ready-made infrastructure; living space here is always more valuable.
Start-up capital- from 3 million, but can be realized without money.
Construction time- about a year. You can find a ready-made house, then you won’t have to wait so long.
Income in case of sale there will be 20-25% of the costs, when renting 100-200 thousand per month.
9. Modular houses - affordable and always in demand
These are private, one- or low-story buildings, assembled from ready-made structures directly at the factory. Since all building blocks and standard designs are standard, there is no need to spend time on design, selection of materials, etc., and the house itself is assembled in the shortest possible time in any weather, and then delivered to the site.
And this will not be a temporary building, but a full-fledged house, insulated, with all the amenities, where you can live all year round. Being significantly cheaper than both a city apartment and a house individual project, he will easily find buyers.
Start-up capital- from a million rubles.
Project implementation period- 1-2 months.
Income depends on the size of the house and ranges from 150 thousand rubles to a million.
10. Apartment in Berlin - a super-reliable investment and monthly income
As an investment, real estate has always been considered one of the most reliable, however, even here there is a gradation, somewhere the price square meter falls, but in some places it grows steadily.
And one of these places with stable growth is Berlin. The population of the capital, and therefore the demand for apartments, is steadily growing. At the same time, 85% of housing is rented, which means that the apartment will become not only reliable investment, but also a source of stable monthly income. And the German state guarantees the inviolability of your property.
Start-up capital- you can get a loan with an initial payment of 50 thousand euros.
Implementation period- You can find and buy an apartment within a month.
Income from rent - 9-12 thousand euros per year.
11. Sublease of an apartment - income without investment for active people
Most owners of rental apartments perceive them as a source of passive income, renting out long term and receiving rent once a month. But you can get two to three times more from the same apartment if you rent it out daily. The greatest demand for daily rentals is in the areas of railway and bus stations, near large markets and other places where there are many visitors.
By renting such an apartment for a year and renting it out to business travelers and other visitors for two or three days, you will get a good rental business and provide yourself with an impressive income with minimal investment.
Start-up capital- 40-60 thousand as rent and deposit to the owner.
Implementation period- it’s worth spending two to three weeks searching for a suitable apartment and checking the demand for daily rentals.
Income- depending on the season, 60-100 thousand rubles per month.
12. Rental business - dormitory for workers
Most often, apartments are rented to families and individuals, but much more income can be obtained by housing a team of shift workers. They are looking for the cheapest possible housing, while their demands for comfort are more modest, the main thing is a place where they can sleep.
To organize such a hostel, you need to rent an apartment, preferably a multi-room one, put 4-6 bunk beds in each room and charge 6-8 thousand per bed. Those. 50 thousand or more from each room.
Start-up capital- approximately 200 thousand for renting housing and purchasing bunk beds.
Implementation period- if the apartment does not initially require repairs, it can be refurbished in a week.
Income- 40-60 thousand from each room.
13. Home staging - we sell housing quickly and expensively
The task of every seller is to sell his apartment faster and more expensive, but not everyone knows how. Home staging is a series of techniques and ways to make housing attractive to buyers. Here are the basic rules:
- Before the showing, do some cleaning to ensure the apartment looks clean and comfortable.
- Make it as impersonal as possible - take personal photographs and drawings, remove memorabilia, because the buyer is looking for an apartment for himself.
- Eliminate all defects, such as leaking taps, non-working switches, furniture and other interior items with defects.
Attachments renovation of the apartment and cosmetic repairs will amount to 50-100 thousand.
Implementation period- from two weeks to a month.
Income- after home staging, apartments are sold 10-20% more expensive, so the profit from an apartment for 3 million will be 300-600 thousand.
14. How to properly reduce the price of real estate
Buying real estate is always expensive, but if you bargain correctly, there is a chance to reduce the price. Here are a few factors that can be played during negotiations:
- Time of sale and starting price of the apartment. If the apartment has been on sale for six months and the price tag has already changed, you have a good chance of convincing the seller to lower the price even more.
- Apartment malfunctions - non-working taps, peeling wallpaper, scratched window sill, etc. Point out any defects to the owner.
- Cheaper offers - say that you have already looked at an apartment of the same size, but cheaper.
Start-up capital- initial payment for an apartment or house from 300 thousand.
Term- negotiations on a price reduction can take from a week to a month.
Benefit- with good skills, you can reduce the price by 10-15 percent. If a house costs 15 million, it can easily be purchased for 10.
15. We turn an apartment into an office and increase profits
Business real estate can be rented out for much more ordinary apartment, and if yours is located on the ground floor, with at least one window on the facade of the building, in the center, near a traffic intersection or in any other place with a large flow of people, converting it into an office can significantly increase your income. Other apartments can also be turned into offices, but renting them will bring less money.
The repair must be of high quality, but neutral, in order to suit the largest number of companies. Furniture is not needed; as a rule, companies have their own.
Start-up capital- a suitable apartment and 200-300 thousand for finishing.
Implementation period- repairs may take up to a month.
Income- additional 50-100 thousand per month.
16. Purchase of bankrupt real estate for 5% of the cost
When an unprofitable enterprise goes bankrupt, its property, including real estate, is put up for auction. And at these auctions it is almost always sold at a discount, which can reach 95%. There are already a lot of people making money here, but there is a place for you too
You just need to find a good object by favorable price on one of the exchanges, register and submit an application. If she wins, sign the contract and start estimating future profits when you sell the property at market value.
Start-up capital- even taking into account the discount, it is advisable to have from 500 thousand.
Implementation period- from two months to search for an object and conduct auctions.
Income- from a million or more for each object purchased at a discount and resold at the market price.
17. Business real estate - earnings from shopping centers, offices, warehouses
Commercial real estate is in some ways even more in demand, because it is successful entrepreneurial activity demand for apartments is increasing. And after any crisis or stagnation, with the revival of the business sphere, it is commercial real estate that goes up first, and only then, when company employees earn money, they buy apartments.
Among commercial real estate, the most profitable are, perhaps, shopping centers with a large number of pavilions for small tenants. Office centers and warehouses almost always find their clients.
Start-up capital- from 5 million for a shopping or office center, for a warehouse from a million.
Implementation period- construction will take from 6 months to a year or more.
Income from a shopping center located in a good location can be a million or more rubles per month.
Commercial real estate can bring very good income with the right approach to organizing a business. If you want to get more information about similar ways of earning money, see about generating income on smart real estate investments.
18. Capsule hotel - the cheapest accommodation for visitors
As the name implies, a capsule hotel is a set of capsules - closed sleeping places for one person. They are compact; if necessary, they can be placed on two levels, and as an investment, such real estate requires little money to begin with, but if successful, it is easily scalable.
The level of comfort here is inferior to a full-fledged room, however, unlike hostels, it gives the guest his own enclosed space and the hotel will be in demand among poor visitors who need to spend the night. It is better to locate capsule hotels near railway stations.
Start-up capital- from a million for a small number of capsules, if successful, their number can be quickly increased.
Implementation period- equipping a capsule hotel will take from 3 months to six months.
Income- from 150 thousand per month from each capsule. From 6-8 capsules in one hotel.
19. Buying and selling real estate - making money on an early investment
Construction apartment building or residential complex lasts for 2-3 years, and you can enter at any stage, even before the foundation pit is dug. And as an early investment, real estate will then at least double in price.
The main thing here is to choose a reliable developer who will not go bankrupt and will not evaporate with the investors’ money, but will complete the construction and hand you the keys to the apartment. So before investing, you should spend a little time studying the construction market.
Start-up capital- from 1.5 million own money, and 100 thousand if you are planning a bank loan.
Implementation period- 2-3 years of construction.
Income- a ready-made apartment will cost twice as much, i.e. your profit will be from 1.5 million.
20. Repair and refurbishment of summer houses - a million rubles per summer
The buyer evaluates any real estate first of all externally, and if it looks unpresentable, he will not buy it or will demand a significant reduction in the price. But if you carry out high-quality repairs, you can safely ask for 500 thousand, or even a million more, for the house. And your task is to find such unattractive houses, repair them (either yourself or hire specialists), and then sell them for a higher price.
Another option is to take summer house and insulate it into full-fledged year-round housing, which will significantly increase its price.
Start-up capital- from 1.5 million for purchase and repair.
Implementation period- 2-3 months of finishing work.
Income- 0.5-1 million and more.
21. Earning money without investment - sublease of commercial real estate
As with any sublease, the main thing here is to rent the property cheaper and then rent it out at a higher price. There may be several possibilities for this. For example, you foresee that in a certain area business real estate will increase in price (the developer will soon rent out a residential complex, and new residents will need shops, etc.), and you rent the premises for a long period in advance.
Or you rent a large retail space, which you then rent out to many small tenants. You can take a poorly equipped room, increasing prices after renovation, etc.
Start-up capital- from a million for rent, another million will be required if you do renovations. Can be done without investing personal funds.
Implementation period- from a month for ready-made premises, and up to three months in case of renovation.
Income- from 500 thousand and above.
But I find three optimal. Briefly about myself - I have been in this field for more than 8 years, I started as a student. And the first option is from those early times. There was little time, I wanted money quickly.
Fee for display or for owner contacts
The essence of this scheme is that you are an intermediary between the tenant and the owner of the apartment, facilitating and arranging for their meeting.
This scheme is typical for a classic real estate agency, but the difference is that the amount of remuneration for a given income is only about 5% of the cost of renting an apartment, because you will not participate in the conclusion of the contract.
Such a small payment for your services will interest potential clients to get help in finding an apartment.
- You should start by searching for apartments and tenants. Advertising sites will help here, social media, advertisements in newspapers, bulletin boards.
- Next, you need to obtain consent from the owner for your participation, which in most cases does not cause negative responses, because the owner does not incur any material costs to pay for your services.
- Then you need to place an ad and wait for calls.
We sell or show an apartment or a list of contacts for landlords. Previously, the scheme for selling contacts was popular, but then it began to be abused and it lost its relevance. However, you can still make money from impressions.
The scheme is ideal if you don't have a lot of time to work. But at the same time we receive a very modest reward. I haven’t used it myself for a long time, but sometimes I see it.
Sublease
You rent an apartment at the lowest possible price, and then rent out the same apartment, but with a markup of several thousand rubles.
In order for this income to be legal, you must enter into an agreement with the owner of the apartment, according to which you will have the right to sublease the apartment.
You will have to try to convince the owner to agree to this deal.
With this income, all responsibility for the integrity of the apartment and timely rent payment lies with you (in fact, no matter what is indicated in the contracts), which is your main argument for making this transaction with the owner.
In order to get the greatest income from work, it is necessary to increase the cost of renting an apartment, but before that it is worth negotiating a certain amount for rent from the owner, and secondly, somewhat improving the quality of life in the apartment you are offering at the lowest possible cost for you, which will contribute to an increase in subrent.
Usually I rent renovated and furnished apartments, buy simple household appliances, TV, and provide Internet access.
This is a scalable solution, but it requires streamlining the collection of payments and maintaining statistics. I used to keep a spreadsheet, now I’ve switched to what they call, and I’m trying to transfer all clients to cashless payments(this has already been done with apartment owners). Of course, agreements with owners and tenants. USN Income-Expenses, online accounting -
Here you need to understand that control of electricity, water, utility bills - it’s all on you. The more objects there are, the farther they are geographically from each other, the more difficult it is.
Daily
The most time-consuming option. I agreed with several apartment owners that I would rent out their property on a daily basis (I increased their payment).
Constant search for clients, check-in and check-out, cleaning after each change of clients.
It is also necessary to optimally select an apartment for this type of rental, that is, it should be located in a developed area of the city for higher demand and be as furnished as possible.
I only recently started working with the daily scheme. Here money turns around faster, earnings are higher, but the risks also increase.
A good option to take extra money is to focus on holidays and sporting events. For marketing - make changes to the interior (to suit the theme).
Making money in real estate is one of the safest and simple types investments. How can an ordinary person make money on real estate?
IN general case, earnings on real estate come down to two, the most profitable and least risky, types of earnings. This is earnings from rent and earnings from resale.
Earnings from resale of real estate
It is clear that in order to sell at a higher price, you need to buy at a lower price. How to do it?
Purchasing real estate at the excavation stage
On average, in Russia, the cost of an apartment from the excavation stage to the delivery of the finished house increases by 30%. Another question is what construction timeframe the developer specifies. Obviously, if housing is built in a year, then 30% per annum is very profitable investment, and if for 4 years, then the return will be only 7.5%, which is less than the return on the deposit. Thus, in order to make decent money on investing in share building, the optimal time frame for constructing an apartment will be less than 3 years.
Also, you need to be very careful when choosing the developer himself. The developer must have already completed properties and have no defrauded shareholders. When checking the developer, you can contact the local Ministry of Construction with a question about its reliability. An advantage will be the cooperation of the developer with large state banks, such as VTB or Sberbank.
Earnings from rent
Many Russians in last years began to actively engage in renting out apartments. And this is the right approach to investing and making money in our country. Earning money from renting out real estate is simple, clear and stable. Of course, you need to find a common language with the tenant and formalize your relationship correctly - this will require some effort. But if the lease is long-term, and the tenants are flexible and honest, you will only remember them on the day you receive money for rent.
Commercial or residential real estate, new construction or secondary housing - if you earn more income from rent than from - this is a good investment. Calculate annual interest renting out an apartment is very simple - it’s yours net profit per year as a percentage of market price apartments. An amount greater than 7% is a good income from renting real estate.
For example, if the cost of an apartment is 2,000,000 rubles, the monthly rent minus utility bills is 13,000, which is 7.8% per annum.
When purchasing an object for rent, there are many factors that influence the cost of rent: the condition of the object itself, the year of the last overhaul, neighbors, etc. But the main thing, of course, is the location and it should be the key when choosing a property for rent.
It is advisable to insure your property against possible damage caused by tenants to your property or the property of your neighbors. The amount of insurance is insignificant, but will allow you to sleep peacefully.
The amount from rent is income, so when renting out an apartment you need to remember about it.
So, how to make money in real estate?
- Buy a new building at the excavation stage for resale. At the stage of delivery of the house, the cost, on average, will increase by 30%. If the construction period of the project is 2 years, the profit will be 15% per annum.
- Buy secondary housing for resale. Such real estate goes up in price by an average of 5% per year. If you also buy it for rent, you can get 10% -15% per annum.
- Renting out real estate can bring from 5 to 10% of its market value.
In stock or other financial market, are thinking about the question of how you can make money on real estate and get passive income.
Investing in real estate is a great way not only to save your money, but also, if invested wisely, to increase your capital. The easiest way to make money in the real estate market is to buy any property real estate and sell it when the price goes up. But this method cannot be classified as investing. This is speculation, which can result in the loss of a significant part of your capital.
There are investors who prefer to own the property and rent it out, receiving rent from it. This investment scheme is longer-term, but quite reliable.
Many novice real estate investors think that such an investment will not provide tangible profit, and it is comparable to bank deposit. Indeed, if you simply buy, for example, a ready-made apartment in a good area of the city and start renting it out, then annually you will receive no more than 5-6% of the money invested. It's not much, but it's stable.
Financially savvy investors rarely buy or invest in real estate with their own personal money. They use financial leverage:
- DDL - other people's money,
- VDL is the time of other people.
Experienced investors recommend being very careful with other people's money, because under unfavorable circumstances, you may lose more to the widow. DDL can include money from banks, private investors, and partners. You can also try to borrow money from your friends or relatives for a while.
The next question arises: where to find real estate that will be in very poor condition and cost little. We need to look for such options. The Internet will be a great help. Please contact Special attention for advertisements like: selling urgently, urgently need money, moving, etc.
A good property for most novice investors, according to experts, is a one-room or two-roomed flat. Some people prefer one-room apartment, others two-room.
How to find a property to invest in and make money
We need to look for options where there is a pronounced accident rate. Why should you look for such apartments? IN in this case You can significantly reduce the initial price of an apartment.
You can buy an apartment in a building under construction from a construction company at an early stage of construction. As a rule, prices for new buildings are 25-30% lower than similar finished housing. Moreover, at the excavation stage and by selling it after putting the property (residential building) into operation and registering it as ownership, you can earn up to 40% or even more percent.
There is another way to find an apartment cheaper than its market value - this is to buy a mortgaged one from the bank / mortgaged apartment. Typically, such apartments are sold by people who are unable to continue paying their rent. mortgage loans. These borrowers are ready to reduce the price of their real estate up to 20% and more. Why the price is decreasing and all the intricacies of selling an apartment, read the article -. By reselling such property, you can also make good and quick money on real estate.
Of course, these are not all ways to make money in real estate; there are much more reliable and long-term methods of investing in real estate, where the profitability will be constantly high every year, and this income will be passive.
On the website you will find other profitable real estate investment schemes where you can start earning money with minimal investment of your own funds.