At the same time, observing foreigners for whom foreign real estate is becoming a good way to earn money, Russians also began to look at investment-attractive housing markets.
When choosing a property, those who are going to buy a house for their own vacation, and those who are looking for an object for investment, will have to answer a number of questions for themselves.
Reconnaissance
The first step of a successful purchase may be a trip to the country where the buyer plans to purchase a house, townhouse or apartment. This makes it easier to choose a region that is suitable for recreation or investment.
In order to get acquainted with the infrastructure, everyday life, future neighbors and the general atmosphere of the city or district, it is worth renting a house here for the season. During this time, you can explore everything from the design features of buildings to the details of local life and cuisine. You should also evaluate which company is better to deal with – a large, well-known developer or a small company that may not have many facilities, but has a suitable project and a responsible attitude towards customers.
There are three main principles on the basis of which real estate abroad is chosen: these are the location of the object; the developer, his reputation and experience; as well as the legislation (including tax) of the country where the purchase is made.
The first point is the most important. The British even claim that all three principles to rely on when choosing are "location, location, location". Especially great attention should be paid to the location when making an investment purchase.
An important role is played by the availability of infrastructure, both existing and the one that will appear in the future. Therefore, you should familiarize yourself with the development plan of the area, and in the case of large investments (for example, the construction of a hotel), with the help of an experienced and reliable lawyer, conduct a thorough examination of the development plans of the area. In this case, it is preferable to use several sources of information: to attract an international consulting company, carefully study the website of the local administration and assess the demand, supply and value in the real estate market of the district on your own.
For buyers who do not intend to build a hotel, but want to limit themselves to buying a villa or apartment, the main factors are the potential rental yield and capital gains (that is, the difference between the cost of housing when buying and subsequent sale). In this regard, you should familiarize yourself with the procedure for calculating taxes that are levied when renting out housing and reselling an object in a particular country. The most loyal countries with regard to capital gains tax are the United Kingdom, Cyprus and Eastern European countries such as Bulgaria.
In order for tenants to live in the house all year round, it is worth paying attention to the proximity to large business centers, major urban highways, shopping malls, schools, etc. When choosing a house for investment, it is important to focus not on your own tastes, but on logic. Thus, two-bedroom apartments are usually in the greatest demand due to the optimal housing area and rental cost.
The golden mean
If we are talking about buying a holiday home and the opportunity to rent it out only during the high season, a good view from the window plays an important role: to the sea, lake or mountains.
At a ski resort, it is necessary that the lift can be reached on foot in 5-7 minutes, it is also important to have a spa and an indoor pool: in this case, the rental period of the villa or apartment will be longer than the ski season. In the case of seaside real estate, the main thing is the accessibility of the beach, a quiet area and good infrastructure.
If a house or apartment is purchased for the rest of the owner himself, they do not necessarily have to be on the first coastline. It's beautiful, but there are also disadvantages, among which are a noticeably higher price and high humidity, which will make it necessary to repair and change furniture more often.
From the windows of the apartments at a distance from the sea, especially if the house is located on a slope, you can enjoy a beautiful view – both of the sea and the whole city. But you will have to get to the beach, shops and restaurants by car, this will scare off potential vacation tenants.
The second line of the sea will be a compromise: housing here is somewhat cheaper, it takes a few minutes to walk to the beach, entertainment and shops, at the same time the house is protected from humidity and noise.
It is better to look for a golden mean in terms of services provided to the residents of the complex. A rich internal infrastructure is certainly a big plus of the project, but it is worth paying attention to the amount of the monthly fee for these services. Thus, the buyer faces another question: what is really necessary for life and recreation, and what can be discarded? Usually, a small garden and a playground, two swimming pools and territory security are quite enough for a family vacation. Such a set of services will cost about 6-10 euros per 1 sq. m. m per year. A more extensive infrastructure will already cost about 14 euros per 1 sq. m. m per year. That is, the owner of a one-bedroom apartment, depending on the amount of infrastructure, can pay 600-1200 euros annually, the owner of a villa with an area of 200 square meters. m in a closed village – 2000-3000 euros.
Large developers, as a rule, cooperate with management companies that are engaged in the maintenance of the complex – cleaning the territories, looking after the garden, preparing the residence for the arrival of residents and minor repairs. You should find out in advance what is included in the total cost of services and what you will have to pay extra for.
The payment procedure must be specified in the contract with the management company. Payment is usually made monthly or quarterly, and a small percentage is charged in case of delay. Many management companies offer to regularly withdraw the necessary amount from the bank account of the owner of the property: in this case, the bank, if it does not have an agreement with the management company, will take a commission. However, most often the service company provides the client with a list of banks with which it works and helps to open an account in one of them.
Using a live example
Seaside resort towns are divided into two parts: a tourist zone and areas with houses of local residents and offices. So, in Paphos, one of the largest resorts in Cyprus, the tourist zone is located at the bottom, along the entire coast, and the city actually has two centers: one is a tourist center, on the embankment, and the second is an administrative one, in the "upper" city. They are connected by the long avenue of the Apostle Paul.
Residential complexes in the tourist area usually include internal infrastructure, a large fenced area with gardens, swimming pools, its own restaurant and reception. Complexes under construction in the "upper" city, as a rule, are a building on a small territory with parking. Housing prices here are 15-20% lower than by the sea, the cost of maintenance in this case is minimal, but you have to get to the beaches by car.
For both leisure and investment, it is better for a foreign buyer to prefer real estate in a tourist area. In this part of Paphos, more affordable real estate is located next to a bustling tourist center, and expensive, up to elite, is closer to historical monuments and protected natural areas.
In Limassol, the second largest city in Cyprus and its main business center, the situation is reversed: the closer to the center, the more expensive the property. However, the most prestigious area – Agios Tikhonas, where villas are sold at prices from 1 million to 20 million euros, is still located far from the center.
On average, one–bedroom apartments in Cyprus are estimated at 60,000-180,000 euros, two-bedroom apartments at 120,000-270,000 euros, and a small villa will cost about 400,000 euros. For 1 million euros, you can buy a house with an area of 200 sq. m. m in a prestigious area.
When buying real estate in a particular country, there are subtleties for which you should consult with specialists. So, the main problem when purchasing a house or apartment in the Cyprus primary housing market is related to obtaining the title of the owner certifying the rights of the owner. Some developers issue the title only 10 years after the completion of construction. Major developers, among others, are delaying the registration of the title.
The owner, without having the title of the owner, has all the rights to the property, but does not have the opportunity to put his apartment or house up for sale on his own: he can sell the house only through his developer, paying a commission of about 5-6% of the cost.
Therefore, investors whose plans include the resale of the object in the foreseeable future, it is better to purchase real estate on the secondary market, with a ready-made title of the owner. In such transactions, it is recommended to use the services of a Russian-speaking lawyer.