P R O P E R T Y
Income-generating real estate - properties that earn income for the owner
The main reasons for buying investment properties include the following:
- passive rental income without participation in management
- investment as a way to prevent dilution of passive capital by inflation
- project cost growth ahead of inflation
- creation of inheritable assets
We divide the whole range of income-generating properties into residential and commercial real estate. Residential properties include apartments, apartment buildings and country houses that bring passive income to their owners in the form of rent. Commercial income-generating properties are non-residential buildings and premises, such as business centers, warehouse facilities or catering outlets, that are operated by individuals or legal entities with a view to gaining profit.
Acquiring income-generating spaces can be seen as a real way to earn profit on the market. The owner of a property gets the opportunity to increase their income thanks to an inflow of cash in the form of rent, and to increase their capital due to the growth of the value of the property. Thus, if the process is managed properly, the owner of either residential or commercial property will get a source of income with minimal personal involvement on their part.
Our company works across Europe. However, we believe that currently, western Germany best meets the criteria of conservative investment with low commercial risks. It also allows for a «Hands Free» approach, where the investor is not involved in management, and investments are autonomous. This combination of advantages comes at a price, which is profitability. However this is actually the crux of the conservative approach.
Today West Germany is the country that best meets these qualities. For example, North Bayern has the highest industrial growth in Europe, and is a real sector of the economy. In the area between Munich and the airport, there are transcontinental corporations, heavy machinery enterprises, the BMW plant is expanding, a new AUDI plant is under construction, and the airport itself is being expanded by building another runway and terminal to turn the airport into a transit hub. This land has the highest business activity in Europe, exploding demographics, and highly-skilled jobs.
There is a huge excess of demand relative to supply of housing. As experts in low-risk conservative investments, we favor investing in residential properties - apartment buildings. In cities with positive demographics, the average occupancy of apartments is 95-96%, and this is the highest rate in Europe. In Russia, we are accustomed to the fact that the rental profitability of commercial properties is considerably higher than that of residential properties. However, this is different in Europe. The difference here is within the margin of statistical tolerance, but the market risks associated with residential real estate bought or built in the right place are immeasurably lower.
The obvious drawbacks are that finding here a profitable complete property or a good land plot for development at a reasonable price is like looking for a site for development on Red Square. Even those rare plots, where even the cost of properties to be built will be apparently higher the market price, are sold out before any advertisements are placed.
The good news is that our company is currently conducting several projects and a large construction project in that region. We have a very good reputation among municipal officials and have access to non-public information and closed databases of projects, sites and the master plan. Thus, we have a rare opportunity to occasionally receive interesting projects for development.
Please contact us directly for a personal appointment and further details.
As an illustration, we give you a couple of investment objects in completely different segments :
- Kempinski Wien- Block of flats Hannover- Spa-Hotel Bad Gastein- Hotel Salzburg