investor or a group of investors
In recent years, key rates in the EU have dropped to a record low. Bank financing fell in price to 1.5–3% per annum, and with it, the profitability of deposits, bonds and rental business decreased.
Investors began to look for new ways to make money. Many have turned to more profitable value-added strategies — building construction or redevelopment. As a rule, to independently engage in such a business requires an impressive budget and experience in the local market. However, now small investors can also participate in value-added projects through mezzanine credit and crowdfunding platforms. Continue reading
Why is real estate more expensive or cheaper in one place than in another? Often the difference is due to the cost of transport: the cheaper logistics costs, the more expensive a square meter.
For example, the profitability of the plant near the highway is higher than far from it, since the delivery of materials and finished products is cheaper for its owner. Also, the store’s profit is higher if it is located in a residential area: customers often go shopping on the way home. The cost of such real estate is higher, since the price of commercial properties is determined on the basis of a forecast of future income. Continue reading
Rental rates for rental businesses in Europe have been falling for the past few years. According to a PwC study, Emerging Trends in Real Estate, in the eurozone, they dropped from an average of 6% in 2009 to less than 4% in 2017. Many investors have switched to redevelopment projects (they are also called value added projects), with which you can earn 10–20% per annum on invested capital.
The essence of such projects is that an investor or a group of investors acquire real estate in poor condition below market value, repair or rebuild the object and lease it or resell it to end customers at an elevated price. Continue reading