Investments in Commercial Real Estate – Ukraine 2021
Commercial real estate is one of the fastest and most profitable ways to get a stable income. Compared to others, real estate investments are more profitable than bank deposits. And if we talk about the stock or foreign exchange market, then the first method is much safer and you will not have to risk anything. 8 out of 10 investors, deciding which direction for investment to take, leave their choice on real estate. And if ordinary people invest in residential premises, then professionals know that commercial real estate is more profitable. A good investor is the one who is able to choose the right premises for investment and consequence to receive well income possible and will not regret his decision.
Before starting your own business, it is important to grasp the essence and understand everything well. The investor must understand that he should start by defining what exactly he wants to do and choosing a location that plays an almost key role. Commercial real estate is usually divided into:
- The so-called social real estate with a big daily flow of people. These are airports, theaters or cinemas, and similar institutions;
- Properties for short term rent: houses, apartments, hotels rooms etc.;
- Retail premises, as a rule, are shops, markets, supermarkets, boutiques, and others;
- Land plots that can be equipped for camping or made gardens, fields, and just places for recreation;
- Warehouses, factories, factories, and more;
- HoReCa or Hospitality premises. These are just all hotels and hostels, cafés and restaurants, bars, gyms, shopping centers, entertainment centers;
- Office premises. These are business centers, office buildings, or just offices;
As you can see, the choice in this area is quite large and extensive, but, however, it should be understood that not all will immediately bring a good income and some premises is less profitable than another. If you are focused on generating passive rental income, then be prepared for the fact that not all commercial buildings and premises are suitable for this.
Once you have decided what you want to do, it is important to understand the essence of commercial real estate. In fact, investments in commerce exceed investments in residential premises, but the income, of course, is higher in the end. In order to run an office, warehouse, or store, you will need management experience or an in-depth understanding of every business process. Our Proriat Hospitality Partners team is ready to provide you with reliable start-up and management support. We have many years of experience in opening projects, in our portfolio are not only modern restaurants, bars, and cafés, but also shopping and entertainment centers, hotels, and business centers. In order not to be mistaken and choose the best investment option, it is best to work with professionals. We will correctly assess all the risks and make calculations for the future.
The investor should be prepared to immediately draw up a detailed business plan, in which all risks and possible failures must be taken into account. Only with a clear goal and understanding can you succeed. Before implementing the project, you also need to prescribe the return on investment of the project, with which our team is also ready to help. Professional investors always pay attention to the ROI period of the project. In this regard, it is easier to invest in residential real estate, since apartments and houses are bought up faster, and later they do not require large investments, professionals in the real estate market, always strive to invest personal funds in premises that will then pay off in a short time.
Considering the quick ROI and benefits of the purchase, commercial real estate is best suited. For example, if you buy an office in the center of the capital city or not far from the center, it is best to consider premises in good condition, so you will save time and money. The optimal solution would be a room of 120 sq.m., its approximate cost will be $ 120,000. The farther the office is from the center, the cheaper it is, but you need to take into account the traffic of the area. A place with high traffic of people, where it is always crowded, pays off best of all. If you rent out the premises, the price will start from 10 to $15 per 1 sq.m. The tenant also pays for utilities.
If you agree on a price of about $12 per sq.m., then for 120 sq.m. you will receive $1440 per month and $17,280 per year. Exactly according to what scheme you can calculate the ROI of other premises in your city. This method is called passive rental income, and it is the most common and profitable. In fact, you invest in real estate once, and then you just get a long-term and regular income.
If you think that the place is a good demand area and you are not happy with the current income, then you can increase it by, for example, improving the appearance or technical condition. By investing in the renovation of the premises, you increase its value. In addition, commercial real estate can guarantee ROI several times faster than residential real estate. The profitability of residential real estate is up to 10% per annum, and commercial real estate even reaches 20% and more. However, you should understand that even if you rent out real estate, it will still require some maintenance. If the tenant regularly pays the bills all the time, the owner will still have to periodically conduct renovation.
Proriat Hospitality Real Estate are always ready to assist you in investing in commercial real estate. Together we can find the best option for you and find a way to return your investment in the shortest possible time.