You are here

Foreign real estate. Review of property abroad.

Acquisition of property abroad is a safe investment because prices in the prospective countries are growing. Very beneficial to buy villas or commercial buildings during construction for resale. Not too big, but a steady income brings demise. Those who wish to start "playing for high stakes, worth thinking about investing money in the operating business or building. Features buying a property abroad commented head of foreign real estate corporation "BEST Real Estate" - candidate of historical sciences Julia Titova.

Motives for investing in property abroad.

The choice of method of investment depends on the ultimate goals. Purchase of real estate or business abroad can be seen as a way to diversify the risks of accumulated investments, as creating a source of income when moving to a new place of residence or the joining of an additional element to the existing organizational structure in the Russian business.

If the person moves, or just spend a lot of time outside Russia, he will be able to control the conduct of the acquired business in the country. Hence, the choice is guided by key criteria such as the competitive environment, the prospects for the industry, specific business and financial capabilities, profitability. In this case, it is appropriate to the acquisition, as an industrial enterprise, and a beauty salon.

Often, the Russian companies (especially export-oriented production), in which there is a need to expand the boundaries of the case, buy a related business in the countries - EU members or candidates for it.

Firm focused on imports, often are interested in purchasing overseas commercial enterprises (eg, textile plant in Turkey or wineries in Bulgaria).

The most common investing abroad to diversify risk.Now Russian clients to discuss the unprecedented growth of prices in Russia in general and Moscow in particular, resulting in fantastic figures for European countries. Say, buying an apartment in the construction phase, in six months can "earn" up to 30-40%. But do not forget that sometimes the construction lasts for years, courts have stretched endlessly, and very long time before a person gets his / her property in the property. In short, a reasonable investor should first create an investment portfolio, including various degrees of risk and return investments, and then to decide whether he will choose a fast-growing Russian economy is stable or well-established legal system. This applies to both residential and commercial real estate.

Investing in residential property.

Consider the experience of the most active buyers overseas - the English. Certainly, the median income ranks Britain's higher than the Russian. But the cost of living, along with the cost of houses and apartments in the UK is significantly higher than in many other countries. This is one of the reasons for purchasing real estate abroad. Nonetheless, many are buying apartments and villas are not for living and even for recreation, but primarily for the purpose of investment (and often take more than one object in different states).

Spain, Egypt and Cyprus for a long time among the most popular among the inhabitants of the British Isles destinations. Today, they look particularly advantageous due to excellent credit policies pursued by their governments. The interest rate on the loan is usually 3,5-4% with growth in property prices by 15% per year.

In recent years, the English property market has been in vogue expression emergency markets - «markets that require decisive action." These include Bulgaria, Turkey, Montenegro, Czech Republic, Croatia, the Baltic countries and Russia.

The economic situation is characterized by extremely high price increases, which is a definite advantage. However, the infrastructure in these countries is still evolving and does not correspond to European standards in full, and the legislation only seeks to international standards, raising concerns about some of the more skeptical investors from Western Europe. Recognized minus markets that require decisive action - the lower the liquidity of real estate (lots of vacant space in the new areas, a large number of buildings). In the opinion of ordinary Britons, the Russian law on the background of the other looks like one of the most intricate, and the market - the least predictable. Therefore, the British and Irish prefer housing in Egypt (Sharm el Sheikh), Bulgaria (especially in the Southern Black Sea), Turkey (mainly in the Aegean) and Montenegro (primarily in the Bay of Kotor).

The most promising area of ​​investment in residential real estate - buying construction of apartments, townhouses and villas. At the zero point offering the most favorable terms of payment (eg, interest-free installments for a period of construction), various finishing materials, the possibility of a change of planning, a wide range of facilities and, of course, the best prices. The average duration of erection of the new complex from the ground up to turnkey - about 18 months. In each case (given the location, size of the complex, the presence of its own infrastructure, etc.), the cost increases by 15-25%. The overall growth in property prices over the period of construction in markets that require decisive action, is 20-50%. Thus, buying a "zero" apartments for example, in Egypt, an investor and a half years will be the landlord, whose market value is at least a half times higher than the original.

All we have limited resources. This, unfortunately, a universal rule, it works always and everywhere. People who choose their anything, do not buy the most expensive, not because they cannot estimate its positive qualities, but because of the much more prosaic: no money. Russians who buy real estate abroad, are no exception - they also have to be guided by considerations of cost.

"Roots" cheapness.

What is the minimum amount, which generally makes sense to go to market abroad? Precise and clear answer to this question, despite its simplicity, cannot be given. First, of course, because different countries have different market prices. For example, speaking of cheap accommodation in Spain, Natalia Mishurova, manager of the department of real estate abroad, the company "Gulf Stream", refers to an amount of 35 thousand euros - so much, she says, is "arrested in real estate is not the best areas of Torrevieja, is not Seafront and requires major repairs. " Somewhere in Bulgaria with about the same amount you'll feel like a king. At the prestigious Sunny Beach for 37,200 euros to buy a studio of 55 square meters. m - it will be a new residential complex with pool and playground, with panoramic sea views (data Stanislaus Singel, President of International Real Estate Agency GordonRock). Is it worth the same 35 "Euroton move to the Cote d'Azur (prices start from 12-15 thousand euros per square meter. M) - and we have an unpleasant surprise understand that we can afford except that doghouse.

The second point - the location of the object. Most of the apartments purchased by the Russians (and any foreigners) are classified as "holiday homes". Accordingly, they are highly valued parameters such as distance to the sea and the view from the window. Radically increasing the path to the beach (it happens, and 4-5 km, and even 10-15, which, of course, excludes the possibility of walk), we can be as radically reduce the price.

Like this person to you - God forbid! But we should remember that one of the most useful qualities of the real estate is liquidity, and, possible in case of need to sell quickly. I object to that "three days on the deer, the liquidity is bad. "By buying them, we should understand that it is often frozen money" - Natalia Zavalishina categorical, general director of MIEL-DistantPropertyManagement ».

Another "reserve price" is associated with quality. In addition to apartments in modern LCD equipped with all necessary infrastructures, in every country there are old and substandard housing. "Over 20 thousand euro can be found in almost all the slums around the world, even in the U.S. and Europe - I am sure Denis Evseev, Managing Partner, KINGSLAND. - But in case you did not buy property, and problems, which eventually will become more and more. Low quality, incidentally, may be a new object - if the developer builds them with a dubious reputation. Finally, the issue of "quality" can relate to most of the builder: going to (again for reasons of economy) under construction, you can run into a construction company, which promised but did not. Sort things out with the likes of "business entities" in the court is not easy, even in Russia (you - a full-fledged citizen, knows the language, can easily come to the court for an hour), and that really there to talk about abroad.

And the last of the "cheap". Abroad, unfortunately, not less, than we have distributed a "form of work" as an advertisement for a low price. "In Antalya, some companies offer an apartment for 25 thousand euros, but when they are accessed, they say that the object" just yesterday "purchased - tells Anastasia Bakulin, senior manager of sales department EKOL ConstructionInvestment. - Still on sale for 40 thousand I do not know if it helps them to increase sales, but in my opinion, it's not very honest. "

What we buy for the budget minimum - from 10 000 euro?

Yet, what prices and in which countries can be considered minimal today? "I personally know someone who has recently acquired a small but very decent house near Leipzig for 15 thousand euros - said Anastasia Duderova, head of foreign real estate companies Deltaestate. - The service, he is often in Germany, so this housing will be used as a time for me, and for seasonal holiday for the whole family. If proximity to the sea and major European cities are not very concerned about the buyer, to find an inexpensive option in some depressed areas of the country it is quite possible, even at 10 thousand euros. "

As to the full "resort" options, then our experts advised to focus on the amount of 20 thousand euros. "In Bulgaria (one of the most popular countries) for that amount you can buy an apartment in Sunny Beach - says Anna Kasimov, an expert on Sales MostProperties.com. - Yes, it will not be the first line of the sea, but you get the full property. Over $ 30 thousand euros, the expert continues, you can buy an apartment in Thailand. The apartment is not very big and most likely in a newly built complex, which will pass only in the years 2011-12. But it will be possible to swim in the ocean all year round.

In Egypt, says Stanislav Singel (GordonRock), prices in the LCD closed on the beach in the north of Hurghada start at 25 000 $ in Turkey in the LC in Antalya (next to the sea, swimming pools and common for children, a fitness center with Jacuzzi and sauna) 30-meter apartment with a full finish will cost from 37 000 $ in Greece (Halkidiki) 1-bedroom apartment in a 50-70 square meters, up to 500 m from the sea is 42 000 -60 000 Euro.

Raising budget: up to 100 000 euro ...

In such a much more solid budget significantly expands the possibility of the buyer. You can choose a property in the already mentioned countries - but, of course, it will have qualitatively different objects. "In Bulgaria, over 70 thousand euro offer one bedroom apartments ( by our standards, doubles) at 200 m from the sea, - says Natalya Zavalishina (MIEL-DPM»). - In Turkey, for the money, in some cases, you can count on housing and two bedrooms.

Or you can "expand the geography, coming on the market in other countries. So, according to Natalia Zavalishin under this budget are available one bedroom apartments in Calabria (southern Italy). It is possible to buy small flats on the outskirts of Prague. Available and the studio are not the most prestigious areas of German in Berlin and Düsseldorf.

"In Cyprus, - said Sergey Demchenko, Director of Business Development LemestiaGroup, - named for the money offered one bedroom apartment (54-60 square meters. M) in the finished complex just 800 m from the sea in Paphos or Ayia Napa. Also in this budget we can offer a small shop (60 square meters. M) in the district of Paphos, 200 meters from the sea. "

Denis Evseev (KINGSLAND) recommends purchasing in Spain, but adds that in principle, such a sum can buy a small (17 square meters. M) studio in the Alps in France. Or a bungalow on Goa or Thailand ". Catherine Bekarevich (MostProperties.com) speaks of a house in Finland or the USA.

... And up to 200 000 euro…

With more solid budget (for example, 200 000 euro - this, incidentally, not much how great the money by the standards of Moscow real estate market), our horizons expanded even more. In addition to "extensive development" (the country the same, only grows footage and convenience), you can find something new. For example, says Elena Yurgeneva, director of real estate companies KnightFrank, in the Algarve (Portugal) in the new LCD offers apartments with 1-3 bedrooms.Their price - from 200 000 euro.

There is an opportunity to go to Italy - but not in Calabria (the cheapest in the region of the country today), but in a place far more prestigious, such as in Tuscany. The new LCD 50 km from Florence, offers apartments in the 60 square meters. m. The complex infrastructure includes a swimming pool and fitness room. Price - 185 000 euro.

And finally, it is permissible to go to the most likely attractive to foreign countries - Great Britain. Anyway, it was there in droves (if there is this phrase generally applicable) are sent by Russian oligarchs. Of course, 200 "tons Evrika" will not allow you wormed into neighbors to Roman Arkadievich, but something that can be a decent buy. For example, a home for the holidays in Sherburne (south-west of the country). The new complex is located in the quiet countryside with stunning views. Home for 2-3 bedrooms with private parking available for 165 000 pounds. Or apartment in the 42-47 square meters. m, finishing in a new modern residential complex in the heart of Birmingham - for 150 000 pounds.

Do not forget about additional costs.

Traditionally, our people are in his pocket, a certain "amount of X, believe that it was her they could buy property. This pushed the Russian reality, where there are no taxes on the acquisition, and stamp duty amounts to a symbolic sum of 1000 rubles. In many foreign countries differently - there is the acquisition will give much more than is written on the price list.

"For example, in Italy or France, additional costs may amount to 10-14% of the amount of real estate - warns Natalia Zavalishina (MIEL-DPM»). - This is the VAT, a lawyer, notary, translator, and so on. " "In Cyprus, - says Sergei Demchenko (LemestiaGroup), to the purchase price should be added to the payment of stamp duty for registration of a contract in the amount of 0,15-0,2% of property value. But there is much more significant waste: a tax on transfer of property, ranging from 3% to 8% of property value. In practice, the title is issued by the state within 3-5 years after completion of the facility, so that the owner has the opportunity to accumulate the necessary amount.

In general, different countries, spending in them too, and their size may be the subject of a separate discussion. But in general, summarizes Anastasia Duderova (Deltaestate), we must be prepared to ensure that the purchase would have to pay another 9-13% of property value.

Business investment.

Acquisition of business abroad - a difficult process that requires significant time and associated with a certain degree of risk. For a successful transaction it is necessary not only to pick up an object, but also attract a reliable law firm in the country of purchase. And in order to minimize the risk, it is desirable to conduct the audit and tax audit of the object. Thus, the first step is to find a reliable partner in Russia, which will link both the seller or his representatives and with the legal and auditing firms.

When a decision is made, purchase procedure looks roughly like this. Conduct a comparative analysis of economic indicators of possible countries, selected states and regions. As a rule, preference is given to the capital or the well-known international resort. Further, based on the preferences of investors picked up the object.

Primary information about the object consists of summary data about him, his pictures, information indicative of financial performance over the past few years. If the primary information to investors happy, it makes sense to visit the area for visual inspection of real estate and other assets owned by the acquired company. During the inspection an acquaintance with the owner, who can explain and comment on the interesting aspects of doing business. The result of the meeting can also be a signing of a protocol of intent, where the parties fix the basic characteristics of the transaction (price, payment schedule, etc.).

The next step will be to conduct an independent due diligence the selected business. Thus the investor gets a complete picture of the possible risks. The examination results should be used in negotiations with the seller when discussing the value of the transaction.

If the price and conditions satisfied, proceed to prepare the sales contract. His project is prepared, as a rule, lawyers buyer, taking into account issues identified during the examination of risks. The final text of lawyers the parties agree with the participation of the buyer and seller.

Between the signing of the contract of sale and closing of the transaction takes time required to complete specified in the contract conditions (the preparation and transmission to the buyer the original financial and other records of the acquired company, permitting local authorities if necessary). In closing, the parties shall issue to transfer ownership to the shares / share firms, as well as the complete settlement of the transaction.

Thus, in the process of purchasing commercial real estate for advisers from Russia, as well as legal and auditing firms in the country of purchase business. That is, should include the cost of their remuneration, the amount of which varies from the amount of work performed and the existing rates.

In most cases, preference is given to hotels and restaurants. They are easier to manage from abroad; they are less susceptible to market fluctuations. An objective assessment of the financial condition of hotel facilities is relatively simple, and all assets of the business are on sight (coastal hotel is close to the sea and the technical condition of the rooms). Preliminary assessment of the details can be photographs, but for a final decision is enough to visit the area to inspect the object.

Many entrepreneurs acquire retail and office space to subsequently lease them, or operate independently. However, the extended version of the reverse: the Russians removed the area to fit your needs.

Speaking of buying not just a commercial real estate adroad and operating business abroad, it should be noted that the price of the object value of assets, including real estate, 50-70%, the rest - the payment for organized business. This is especially true in high-top hotels and restaurants operating in good locations. That's why some investors prefer to build a new facility or purchase a new facility. Say, a brand new hotel is about 30-50% cheaper than successfully worked for two or three seasons (this is without taking into account the growth in property prices and other macroeconomic indicators such as inflation). In addition, the construction cost itself is always much lower selling price. So that the bowls are the weights of two indicators - time and money. And yet, perhaps, a trifle like headache associated with the construction and building business. If investors need a valid business now stands ready to take a successful facility. If you have time to wait and the opportunity to unwind in the end you can get a good savings, which will surely exceed the income from the operation of the facility.

And in any case, whether the investor commercial real estate leases it yourself or hire, can provide different ways to manage it, depending on the willingness of the entrepreneur to a full or part-time employment. This refers to self or trust.

Now the main reason for the acquisition of foreign real estate is to buy for myself - a "second home", an apartment for a family holiday by the sea. Experts note that the preferences of Russians have changed during the crisis, even a year ago, the main reason for such a purchase was the possibility of profit: buy cheaper - sell higher. Today, Russian buyers have become more picky - after all his bad you cannot buy. Buyer's emphasis on the quality of an object, selects only the most attractive offers.

However, the "second home by the sea" interest of the Russians to foreign real estate is not depleted. After all, today the situation is not as difficult as it may seem. On overseas square meters cannot make quick, but you can buy and wait. The crisis will not last forever: in some countries, housing prices have stopped declining, others decline stopped after a year or two, but in some regions of Germany, Egypt, Southern Italy and Cyprus prices to fall and did not intend. Experts predict that within three or four years, real estate price will rise again in most countries.

To summarize:

What are the advantages of today, international real estate markets for the buyer?

What to look for:

1. Should carefully choose a company-builder or a realtor, since not all market participants offer quality and reliable services.

2.When selecting real estate buyers are often guided by short-term emotions or blindly trust the loud and colorful advertisements. It is important to not buy something that is actively selling, but what is really necessary. It is therefore necessary to thoroughly examine the market you are interested in and compare it with others.

Their assessments of the current state of real estate market and practical recommendations to customers divided by experts from different countries.

In Egypt, only cheaper unattractive property. On the first line of the sea prices are still rising by an average of 5%. If it were not for the global financial crisis, the rise in prices would be dynamic. The volume of transactions in the upper price segment of the increases and decreases in the bottom. The Egyptian elite housing is several times cheaper than in other resort countries, which creates favorable conditions for investment.

With regard to construction, the situation is contradictory: some projects were suspended, others continue to actively build and sell, and some companies are even starting new construction. In the future we expect a continuation of this trend: cheaper segment will be cheaper, the cost of housing medium and high grade will remain stable.

Demand from the Russians is growing, although the number of transactions has not increased, since the buyer is still trying to sort out the current economic situation. Most Russian buyers Egypt real estate - the inhabitants of St. Petersburg, Moscow, Yekaterinburg, Nizhny Novgorod. Presented and other regions: for example, we have buyers from Kamchatka.

Notes for the investor in egypt: the rental market, especially in the first line of the sea, claimed, as hotels with the influx of tourists do not. Buy Studio apartment in egypt in a closed complex is guarded by 25 000 €. If a walking distance from the object is all that is necessary for the tourist - a great beach and an area with a vibrant nightlife, this housing will be popular with people wanting to rent.

Your property in Egypt requires the knowledge and skills, because of strict legislation is not there, so you must be very careful when choosing a company with which you are working on the stage of legal registration in egypt.

Author: Vladimir Abgaforov

• Bulgaria. In the event that Bulgarian banks will start selling in droves for the excluded mortgage debt facilities, housing prices in the country could fall even lower (projected consultancy Colliers - 10% compared to 2009).

• Spain. According to the President of the Spanish Mortgage Association Santos Gonzalez Sanchez, the real estate sector of the country "bankrupt", and funding for construction projects in the field of real estate has ceased almost completely. "The news of the bankruptcy of the Spanish property sector is neither bad nor good - says the head of an independent consulting agency SpanishPropertyInsight Mark Staklin. - It is a reflection of the current situation in a market that is experiencing hard times. It is obvious that the choice of property under construction should be approached with caution, because the development company which is engaged in its implementation may fail. In my opinion, 2010 is the best time to buy the top-price segment, since they made significant discounts as high as 25%. "

• Latvia. According to major real estate agency in Latvia OberHausRealEstate, in January type apartment with no repair in residential areas of Riga have risen in price by 5% compared to the previous month. In new rates in January 2010 have not changed.

• Finland. According to the cadastral offices in Finland, in 2009, Russians bought about 400 houses in the country. A year earlier the number was 780. Experts believe that this trend is due to global economic recession, as well as the cheapening of the ruble against the euro. The important role played by psychological factors: in most countries, popular among Russian buyers, the cost of objects falling, but in Finland, by contrast, grew. However, respondents Prian.ru portal experts argue that in recent months, Russian interest in the Finnish real estate began to recover.

• Croatia. In January the average price of residential properties in the country decreased by 0,7% compared to the previous month. House on the Adriatic coast of the country during the same period went up by 1,5%.

• Slovakia. In the fourth quarter average price of residential properties decreased by 1.9% quarter on quarter. In the third quarter rate of decline in housing prices in the country were similar.

• United Kingdom. In January, the value of residential real estate rose by 0,7% compared to December and 3.6% - compared with the same period in 2009, according to mortgage lender Halifax.

   The world's largest consulting firm PricewaterhouseCoopers LLP (PwC) survey of 600 professionals of the real estate market in Europe and found that the best direction in the region for investments in office real estate in London. Investment attractiveness of the British capital offices due to the sharp fall in prices and the weakness of sterling against other world currencies.

• U.S. 79 members of Congress wrote a letter to the Ministry of Finance and Federal Reserve with the requirement to take action and protect the commercial real estate market of the country from disaster. The fact is that in 2013 the time for repayment of loans totaling $ 1.4 trillion, taken for the acquisition of commercial real estate in the country, and 65% of borrowers may encounter difficulties in refinancing their loans. Economists say that such a development could trigger a new round of financial crisis.

Weather forecast for Sharm El Sheikh