Investments in real estate abroad. Where and what kind of real estate is now more profitable to buy in Europe

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Recently, among Russians, investments in foreign real estate, including European ones, have become increasingly popular. Moreover, our compatriots invest in residential and hotel, office and retail real estate.

Apartments in France
Vincent van Gogh, Cafe Terrace at Night, 1888

The cheapest housing at the moment in Bulgaria and Estonia

Having analyzed the situation on the residential real estate market in Europe, we can say that the most affordable housing can now be purchased in Estonia and Bulgaria.

According to the leading Russian agencies that offer to buy real estate in Europe. In Bulgaria, the cheapest cottage can be bought for 100 – 150 thousand rubles. For this amount you can buy a house with an area of ​​60 to 150 sq. M. In Estonia, an apartment of up to 50 sq.m. can be bought for 100 thousand rubles.

The second place is taken by Lithuania and the Czech Republic, here residential real estate can be purchased at a price of 200 thousand rubles. So, in a Czech town called Teplice, a two-room apartment in a panel house with an area of ​​53 sq.m. can be bought for 207 thousand rubles.

Germany is in third place in terms of housing affordability. The minimum cost of an apartment is about 280 thousand rubles. Thus, in Saxony you can buy a small apartment up to 38 sq.m. for 276 thousand rubles.

Italy, Finland and Montenegro are next. An apartment in the resort area of ​​Scalea is being sold for 592 thousand rubles. In Finland, in the Punkaharju region, a house built in 1950 is being sold for 750 thousand rubles. And in the Chan region in Montenegro, a house can be bought for 769 thousand rubles.

Investors from Russia and the CIS countries this year, according to experts’ forecasts, will purchase hotels in Europe for 500 million euros.

According to experts from the international real estate agency Gordon Rock, at the end of last year, the total investment in hotel real estate in Europe amounted to 4.5 billion euros. The share of Russian investors was approximately 8%. According to analysts’ forecasts, in 2011 the volume of transactions with European hotel real estate will grow by at least 20%, and the share of investors from the CIS countries, including from Russia, may increase to 10%. Therefore, if we calculate the amount of investment, it turns out that in 2011 citizens of Russia and other CIS countries will purchase hotels in Europe worth more than half a billion euros..

Over the past 2 years, investors from Russia and the CIS countries have become one of the key players in the hotel real estate market in Europe. Russian investors are among the top five major investors purchasing hotels in Europe.

Christian Jereczek, Street Scene

The choice of the country in which real estate is purchased by Russian investors depends mainly on the estimated investment budget:

  • with a budget of up to 2 million euros, investors are showing interest in mini-hotels (up to 25 rooms) in Bulgaria, Montenegro, Czech Republic, Germany and Turkey;
  • with a budget of 2 to 7 million euros, investors buy mini-hotels and hotels (up to 50 rooms) in the Czech Republic, Germany, Austria, Spain;
  • with a budget of more than 7 million euros – they buy hotels (over 50 rooms) in France, Austria, Germany and England.

In the total demand from investors from Russia and the CIS countries, the share of demand for hotels worth up to 2 million euros is 60%, for hotels worth up to 7 million euros – 25%, and for hotels more expensive than 7 million euros – 15%.

It should be noted that hotels in Karlovy Vary, Baden-Baden and Prague have been in the greatest demand among Russian investors lately. It was the heightened interest of Russian, Ukrainian and Kazakh investors that influenced a significant increase in hotel prices in these cities. So over the past 2 years, prices have increased by an average of 1.5 times. Consequently, the payback period for investments in the purchase of hotel real estate in these cities has increased at the moment and can be up to 20 years. This is significantly more than the return on investment, for example, when buying hotels in Austria, London, Hamburg or Munich, which have a payback period of about 12 years.

According to Stanislav Singel, director of the Gordon Rock agency, there is now a significant increase in interest on the part of Russian investors in purchasing foreign hotels with guaranteed income. Their peculiarity is that such hotels are sold with a long-term management agreement, which, as a rule, is concluded with one of the leading hotel chains in Europe. The contract is usually concluded for 15-20 years, and the guaranteed income is 6-8% per annum and is paid by the management company to the hotel owner.

It remains to be noted that many European banks are happy to lend to the purchase of such hotel property. Loans are issued in the amount of up to 65% of the total cost of the object, while the rate is from 3.2%. It turns out that the return on investment in such real estate can reach 11-12% per annum.

It is not enough to buy. How much does it cost to maintain a home abroad

Many investors who buy property abroad do not always know how much it can cost them to maintain a house in the Alps or a penthouse in London. However, when planning expenses, you need to take into account not only the cost of the object itself, but also taxes, fees, utility bills, insurance and other costs.

Management Company. If you want your country house to be kept clean, then you should consider hiring a management company. Managing luxury real estate in Europe will cost you a lot. As a rule, you will have to pay the management company for additional services – the bill may include: pool cleaning, garden maintenance, and more. For example, in France, Spain and Germany, the services of a company managing a villa with a garden and a swimming pool will cost its owner about 2–3 thousand euros per year. The company’s responsibilities include visiting the mansion once a week, recruiting and contracting all necessary staff, and maintaining accounts. Weekly cleaning, for example, costs 60 euros, the maintenance of the pool per month will cost 800 euros, about how much you need to spend on the services of a gardener. So a very decent amount runs up.

Real estate taxes. In most European countries, property owners must pay property tax annually. The tax is calculated based on the assessed value of the property, which is usually much less than the market value, and ranges from 0.1 to 3.5%.

Vincent Van Gogh, The White House at Night, 1890

If we take specific countries, the real estate tax rate is as follows: in Spain – 0.4% for urban real estate and 0.3% for rural; in Montenegro, the tax rate depends on the area of ​​the taxable property and ranges from 0.08 to 0.8%; in Germany, the tax is paid at an average rate of 1.9%, while real estate worth less than 120 thousand euros for individuals and less than 20 thousand euros for legal entities is not taxed.

In France, for example, there are two types of property tax: taxe d’habitation (only a building is levied) and taxe fonciere (a house with a land plot). The amount of tax depends on the area of ​​the object. So, for an apartment with a total area of ​​90 sq. m will have to pay about 400 euros per year, for a house of 120 sq. m from 100 sq. m of land – 1 thousand euros.

In some European countries – for example, in Croatia, property tax is not paid.

In Spain, along with the real estate tax, the owners of houses and apartments will have to pay a wealth tax, the rate of which ranges from 0.2% (property value up to 193 thousand euros) to 2.5% (property is more expensive than 12 316 thousand euros).

Utility bills – they will also have to be paid. However, the amount of utility bills depends on consumption. Meters are installed in almost all houses. We only note that in the countries of Western Europe, the payment for water, gas and electricity is higher than in the south..

If we take into account all the total costs of maintaining a house or apartment, then one of the most expensive countries is France. The maintenance of housing here takes about 2-3% of the total value of the property, including local property taxes, utility bills and insurance. If you compare, then, for example, in the UK, costs are about 1%. In Germany, house maintenance is also quite expensive due to high utility rates. Maintenance of housing in Croatia, Montenegro and Finland will be much cheaper.

Summing up

The European real estate market is currently very attractive for Russian investors. Prices for apartments and houses in many European countries are much lower than in Moscow. That is why many potential investors devote significant funds to the purchase of foreign real estate. And according to the forecasts of many experts, investments will continue to grow and gain momentum. The main reason for this is that property prices in Europe should not rise in the near future, and perhaps in some regions prices will even fall..

Isaac Levitan, Near Bordighera. North of Italy, 1890

Buying hotels in Europe, which in recent years has become a popular type of investment among our compatriots, will also only gain popularity. This is especially true for the purchase of hotel real estate with a guaranteed income. After all, the presence of a guaranteed income makes it possible even for an investor who has no experience in the hotel business to make risk-free investments in hotel real estate in Europe.

However, if you are planning to invest in the purchase of real estate in Europe, before that you must definitely pay attention to the cost of maintaining this object. Since the maintenance of housing in many countries is not the cheapest pleasure.

In general, we can confidently say that in case you want to make a long-term investment, the acquisition of real estate in Europe at the moment is a pretty good investment. In the near future, it will probably not be possible to get a significant income from such investments, and in the future it is very likely to make a profit..

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