Today we will talk about this type of investment, the profit in which, although considerable, is not immediately available. Accordingly, not everyone sees the feasibility of this investment.
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Although, in fact, this type of business is quite effective, especially if you have a significant initial capital and some experience in a certain field… I will not further develop the intrigue – we are talking about investing in the construction of real estate, private or commercial.
Commercial justification
As you know, real estate in our country rarely falls in price, more often-it grows. The exception is the “depressive”, decaying remote areas on the periphery.
Here, by the way, there are also subtleties – you can buy an apartment in some remote village, and in a few years, with the liquidation of the city-forming enterprise in it, this apartment will lose a lot in price.
Or you can do the opposite – by purchasing a room for a song today, tomorrow, with the rapid development of this locality, the price of this apartment will “jump” several times.
But back to a more or less predictable situation. So, the prices of apartments or garages in our country often only grow up. So, investing money at the construction stage, in a few years we acquire real estate, which, in its finished form, has significantly “increased in price”. This rule is relevant almost always and everywhere.
The choice of the Builder
What causes this situation? The fact is that investing money in an unfinished object or in construction from scratch is a somewhat risky decision. Accordingly, the prices at this stage are lower. But, if you correctly approach the choice of the developer, check his reputation, reviews about him and look at the already built and commissioned objects, you can minimize this risk.
The finished object is more expensive, because it is already ready for operation. So, having leveled the risk when choosing a developer, in a few years you have a real estate object that has increased in price several times.
When to buy?
No less important is the construction stage! Investing in construction at the initial stage is more risky, but requires less money. The closer the construction is to its completion, the higher the price.
But still, even after putting the house into operation, the prices of apartments in it can grow. The impetus for this can be the construction of a supermarket nearby, the organization of infrastructure – the creation of entertainment facilities, the opening of a school or kindergarten.
In this situation, the decision is made exclusively by you-after weighing all the pros and cons.
Macroeconomics
When making a decision to invest your own funds in the construction of real estate, you need to assess the economic situation in the country. We should not forget that even the most powerful commercial structures became completely bankrupt or partially failed to fulfill their obligations to investors during periods of economic downturn in the country.
So, the economic crisis is not the best time to participate in shared-equity construction.
Financial support for the developer
Before you invest your own money, find out who supports this construction company financially. This is a very important aspect when choosing a developer, which significantly affects the risks of the entire enterprise as a whole.
Sometimes, you can take out a mortgage from a partner bank to buy an apartment in a building under construction, but this is not really an investment, it is somewhat from another area.
The law is the law
In conclusion, I would like to draw attention to another very important point – the legal component of the project. Before you invest (and they are in this type of investment — a lot) , you need to carefully check all the permits and carefully study the contract offered to you. Especially everything that is written in small print.
It is not superfluous to find an opportunity and consult with a lawyer on this issue. All this also minimizes your risks at the investment stage and maximizes your profit in a few years after the object is put into operation.
In general, the biggest risk of this type of investment is investing in illegal construction. Excluding this fact, we get a fairly reliable and profitable way to generate passive income.
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