The best Russian cities for real estate investment

In our country, ownership of square meters has always been highly valued - that’s why it’s profitable to invest in real estate. The reasons for this: its high liquidity and low risks, constant demand for residential and commercial premises.

In order to increase the efficiency of investments, it is worth choosing real estate in large cities, where it is constantly growing in price. If there is a lack of funds for a commercial option, a good investment would be to buy an apartment that quickly begins to generate income.

Investment Features

It is a common belief that investing in commercial real estate, as well as residential real estate, is a good investment option. The emphasis is on the fact that it always goes up in price, which makes investing in square meters a risk-free investment option. But, like any financial instrument, this option has its own specifics, as well as advantages and disadvantages.

One of the characteristic features: when choosing this type of investment, you must have sufficient initial capital for the purchase. However, there is a way out of the situation - this is investing in the initial stages of construction (or foundation pit, as they say). Typically, real estate increases in value as a house is built. Therefore, it will be possible to either rent out a new building at an attractive price, or sell it after the house is finished, making money on the difference from the purchase.

Why is it profitable to invest in real estate:

• stable profit . Whether you rent it out, use it to run your own business, or decide to sell it, all these operations will generate income. Unlike the same shares, for example, for which no one promises profitability (we do not consider speculative actions with them);
• it has a certain anti-inflationary stability , because over time, increased demand increases prices for everything, including materials for construction and the apartments themselves. This indicator is a kind of shield that protects the investor’s portfolio from inflation. For example, interest received on bank deposits loses part of its purchasing power, often not even catching up with actual inflation.

The ABCs of investing in real estate involve studying not only the advantages, but also the problems that arise:

• As a rule, these are long-term investments. Because of this, predicting market behavior in the short term is very problematic. In this regard, the stock market has advantages, where it is quite easy to predict the behavior of the market, taking into account, for example, news or fundamental conditions;
• not everyone can afford this type of investment: you need to pay a fairly large amount immediately or over a short period of time;
• real estate, despite all its attractiveness, is not liquid enough in comparison with the same shares, for example. In case of urgent need, you are unlikely to be able to sell square meters at the desired price. Either you will wait a very long time, or you will have to lower the price to sell;
• this type of investment requires constant monitoring and certain costs during the construction and operation of the facility;
• The possibility of real estate fraud cannot be ruled out.

Important! Real estate investment training takes place during the investment process. Therefore, over time, experience will come, an understanding of the intricacies of the market and, as a result, an increase in income.

Therefore, we will tell you how to invest in real estate correctly: you need to weigh all the pros and cons, objectively approach the analysis of the situation, your capabilities, and only then make an informed decision.

Rating of millionaire cities by profitability and payback

Diversifying the portfolio

Like any other element of the financial market, real estate investment instruments need to be diversified.

Based on this, the portfolio will consist of:

1. Residential real estate. Everything is clear here: buy an apartment and rent it out. Despite the fact that rents for commercial real estate are always higher, there is always a demand for apartments, unlike the demand for offices or industrial sites. Therefore, there will always be an opportunity to rent out an apartment at the best price.
2. New buildings, moreover, at the construction stage. After the house is completed, the apartment can also be rented out or sold, but at a higher price. It is worth noting, however, that recently cases of fraud have become more frequent, and the difficult economic situation may not allow construction to be completed.
3. Trading. The ideal is to have several thousand square meters of such real estate and get a good income from it, because its rent is higher than apartments. True, there is one significant thing: this investment option is very expensive.
4. Foreign real estate (see Investments in foreign real estate: what are the advantages). This type of investment is gaining popularity due to its attractiveness. You can rest on your own and then give it up. True, you need to study the legislation of the country where you want to purchase real estate in order to understand the costs of its maintenance.

Important! One of the options for investing abroad is purchasing apartments in Bulgaria. Advantages of investing in real estate in Bulgaria: a large number of options, affordable prices, low maintenance costs, pleasant climate, similar mentality.

1. Commercial. These will be warehouses, production sites or offices.

The above can also be called the main directions of investing in real estate.

Rating of Moscow region cities by profitability and payback

The Leningrad region as a whole occupies a higher position in the ranking than the Moscow region. The cost of selling one-room apartments and the rental rate here are higher than in the country, while the payback period (12 years) is only slightly less than the Russian average.

Satellite cities of St. Petersburg

I want to rent out an apartment and receive money on a card

First place in the region belongs to Kingisepp, who is among the top ten leaders in the rating; second place is taken by the city of Kirishi with a yield of 10.4% and a payback period of 10 years. In third place is Vyborg. Gatchina closes the regional ranking: here, renting out a one-room apartment for a year will allow you to return only 6.7% of its purchase price, and a full return will take 15 years.

Vyborg, vagrig/Depositphotos

Looking for benefits

Which real estate is more profitable to invest in is the very first question of the investor.

If you pay attention to residential, it is better to purchase a small apartment for subsequent rental. And optimally, it should be a big city, where the demand for rentals is higher and the cost of apartments is rising. This will allow you to quickly sell it if necessary.

When choosing commercial real estate, “street retail” – premises on the first floors of residential buildings – is still popular. The apartment is transferred to non-residential premises and rented out as a store or service enterprise.

The following example will show which real estate is more profitable to invest in.

The rental yield is calculated as follows: Profit for the year = net income for the year / price of the apartment as of the current date * 100%

For example, you buy a one-room apartment in St. Petersburg and rent it out. Approximately cost of the apartment = 3.2 million rubles. About 100 thousand rubles. will go for minor repairs.

It is expected to rent for 25 thousand rubles. with utility bills.

Profit from tenants = 25 thousand * 12 months. = 300 thousand rubles.

We will accept 10% as unforeseen expenses.

Net income for the year will be 300 thousand - 30 thousand = 270 thousand rubles.

Return on investment = 270,000 / 3,300,000 * 100 = 8.1%.

Of course, the numbers are controversial, but in this case it is better to be a skeptic than an optimist. The main thing is to understand how best to invest in real estate.

Outsider cities in terms of profitability and payback of one-room apartments

How to do everything right

We have decided on the benefits of the investment. It remains to decide how to invest in real estate, what steps to take:

1. Select an investment object. Determine its exact cost and possible costs for preparing the property (if you rent it out).
2. Study the laws relating to real estate. For example, when transferring residential premises to non-residential premises, it is necessary to agree on a large number of formalities and obtain certain papers.
3. Choose a purchase method: if you have the entire amount, great. If not, don’t despair - investing in real estate without money is possible, but your income level will decrease. A mortgage will help you, on which you can receive interest from the tenant. In this case, you will begin to receive income from investments when you pay off your debt to the bank.
4. Weigh everything again and analyze it.
5. Find a competent realtor and make a deal.
6. Prepare the property for delivery. Start the process.

These are the main points you have to go through. The main thing is to choose the type of real estate that suits you both in character and financially.

Important! An important point is taxes. Every individual who rents out owned real estate is required to pay income tax (13%). For the purpose of delivery, it is not necessary to register an individual entrepreneur; you just need to submit a declaration once a year.

Millionaire cities

In first place in the ranking of millionaire cities is Chelyabinsk with a payback period of 11 years. In the general ranking of cities, it took only 49th place. Krasnodar is slightly behind it (50th place in the all-Russian ranking, payback period 11 years). In third place is Novosibirsk. The profitability of one-room apartments here is 8.4% per year, and it will take 12 years to return the entire cost of purchasing a one-room apartment.

Chelyabinsk, BGodunoff/Depositphotos

Kazan took the penultimate line in the list of millionaires. In the capital of Tatarstan, the purchase of a one-room apartment will pay off only after 15 years. Low performance did not allow Kazan to rise above 235th place in the all-Russian ranking.

conclusions

If you have experience in investing and the required amount, this type of investment is suitable for you. It is better not to invest in real estate without money and without minimal experience in such activities; there is a high chance of losing money. Start with a different type of investment, increase your capital, gain experience, and then reach a new level: learning to invest in real estate will take place as you gain experience and in the process of investing itself.

Successful investments and new victories!

Real estate agency business plan with calculations

This free real estate agency business plan has the following objectives:

• Creating a business with high profitability;
• Maximum profit generation;
• Satisfying the demand of consumers - legal entities and individuals in the real estate market related to the purchase or rental of real estate.

A real estate agency is intended to provide intermediary services between the consumer and the seller (landlord) through transactions based on an agreement.

Let's consider the example of opening a small agency. This real estate agency business plan is a sample , which is a calculation based on average prices and approximate values, which may differ from your data. For this reason, it is recommended to carry out calculations for your own business on an individual basis.

Where to begin?

Real estate always remains in value, so investments in it are the most reliable . Moreover, the demand for it is always high, regardless of crisis situations in the country and seasonality. The real estate market is constantly developing and does not experience significant losses. However, in order to make a profit, you need to know how to sell. If you don’t have such skills, no problem - many master classes and trainings are currently offered, with the help of which you can acquire useful skills and new knowledge in the field of real estate, as well as develop existing ones.

You need to learn how to make clients want to contact your agency. This is a very important factor that should be taken into account when opening a real estate agency, the business plan of which can be downloaded here.

It is also important to have a large customer base . We should also not forget about the large number of competitors, which can be large agencies and small real estate offices. You can resist them thanks to the quality of services, loyal prices, and prompt service delivery.

You need to decide who your customers will be. At the initial stage, it is easier to start collaborating with individuals. However, if you are confident in the professionalism of your hired employees, you can strive to cooperate with large companies that, as a result of concluding a deal, will bring much more profit.

SWOT analysis

Before you start drawing up a business plan for a commercial real estate agency, you should not forget about the SWOT analysis, thanks to which you can evaluate the external and internal factors affecting the functioning of the agency.

We cannot influence external factors, such as the level of purchasing power, competition or unfavorable market conditions, or changes in laws. And you need to work on internal ones yourself - hire qualified specialists, provide quick and high-quality services at an affordable cost, motivate employees to achieve a common goal. The strategy and pricing policy should be clearly defined. It is necessary to overcome weaknesses, such as lack of experience and reputation in this field, then it will be possible to minimize the possibility of losses.

Work schedule and personnel selection

When drawing up a business plan for opening a real estate agency, you need to think about the work schedule. The optimal work schedule for a real estate company is daily from 9-00 to 20-00. Limit the working day on Saturday to 18-00, and make Sunday a day off. Then the number of working days per week will be 64 hours, and approximately 275 hours per month.

At first, the staff of the real estate agency will be:

• Lawyer – for competent preparation of contracts and conclusion of transactions;
• 4 realtors: for work with residential and commercial real estate, rental of apartments and industrial and retail premises;
• Cleaning lady - to keep the office clean.

• In the future, it is possible to create additional highly specialized positions.

Business registration

It should be noted, while continuing to draw up a business plan, that a real estate rental and sales agency must be registered in the form of an LLC or individual entrepreneurship. If necessary, it is also possible to open a current account in a bank, then it is not necessary to use a cash register. When registering, the following types of activities according to OKVED are used: 70.31.1, 70.31.11 and 70.31.12.

It is also preferable to make a seal, since the client treats a sealed agreement with more confidence than an agreement without a seal. A license for intermediary services in the sale and rental of real estate is not required.

If an agency is opened by an individual entrepreneur, he can pay a single tax on imputed income. However, for a realtor this is not the most convenient taxation system, since income may vary depending on a certain period. It is best to choose a simplified taxation system.

Marketing plan

Pricing strategy:

The cost of services should initially be stopped at the market average level. It's definitely not worth the price increase. But it is unlikely that it will be possible to reduce it, because the staff has a qualified lawyer, whose salary costs a considerable share of income.

Choosing a room:

A real estate agency office does not have to be located in the very center of the city. The work consists mainly of examining the options offered to the client. In the office they just sign documents and discuss a further plan for cooperation. But you will have to take care of the condition of the premises. It will be a kind of calling card of the agency. Therefore, there is no need to save on repairs or necessary furniture and office equipment.

Advertising:

One of the significant cost items will be advertising. Remember that you cannot save on this. You definitely need to constantly advertise your agency so that it is known. There is no need to use all available promotion methods at once. Firstly, not all of them are effective. Secondly, this can not only reduce profitability, but even completely deprive you of profit. Choose your advertising methods wisely. The most effective levers of influence in the real estate market will be the following types:

• Newspapers free advertisements.

As the name suggests, the cost of such advertising is zero. This type of advertising can bring results, and besides, you don’t pay for it. Moreover, you can place advertisements not about the agency, but about apartments. This type of advertising is called ghost advertising .

• Advertising in specialized publications.

This could be, for example, a magazine or newspaper about real estate. Most often, in this way you can attract clients who are legal entities or people savvy in this field.

• Placing information in local online directories.

Many people search for a real estate agency through such sites, where they usually post information and contact details. And users, as a rule, can leave their reviews.

• Own website.

The thing is expensive and requires constant attention, but it's worth it. Firstly, people can immediately familiarize themselves with the price list, range of services, specialists and much more. It is important to fill the site as much as possible, make it so that it attracts people, is understandable and of high quality. You can develop a feedback system and online consultation.

• Internet advertising.

This type of advertising will be especially relevant if you have your own website. Responses and views will come immediately. It is worth thinking about posting information on Yandex Direct, Slando.ru or Avito.ru.

Possible risks when opening

There are 3 types of risk that can arise in real estate:

1. Increased competition.
2. Crisis, general decline in sales/purchases.
3. Dishonesty of employees/clients.

In order for the business not to turn into a burden and to generate income, the manager needs to exercise control over the work of staff, think through anti-crisis strategies in advance and competently plan work using new technologies and alternative advertising methods. To avoid negative risks, a real estate agency business plan is required.