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Real Estate / Reviews / Bulgaria / Real Estate Bulgaria / Georgia / Real Estate Georgia / Spain / Real Estate Spain / Turkey / Real Estate Turkey / Montenegro / Real Estate Montenegro 02.11.2017
Earnings on renting a property: Overview of Countries by Yield
Which countries real estate it is worth investing for short-term and long-term investments?
If you decide to try yourself in the role of rentier and buy real estate abroad for passive income, define what investments you are interested in - short-term or long-term.
Risks of speculation
For short-term investments, markets will be more suitable for the phase of development. In such countries, prices first fell very quickly and then began to rise and have growth potential. In this case, we are talking about the resale of an object after a rise in prices. Analysts believe that such European cities as Bucharest, Madrid, Barcelona, Sofia, Dublin, Bratislava, Lisbon and Warsaw will be suitable for implementing this strategy.
But this investment strategy is not without risk. At the time of analysis, there have not yet occurred the notorious Catalan events, which, apparently, can collapse prices for several stages due to the outflow of business from the region.
Long-term investments are less risky since they do not imply a quick return of money, but give an annual income of 4-12% per annum, which exceeds the interest on European deposits and helps not only to save money from inevitable inflation but also to increase it.
If we talk about the least affected by the global crisis in real estate prices cities, then this is Berlin, London, Stockholm, Helsinki, and Vienna. The cost per square meter in these world capitals is quite high - from $ 4,5 thousand to infinity. For example, in the center of London, the square meter will cost you at least € 18,000. We will talk about more affordable options for the private investor with an adequate level of profit. Do not forget that before you calculate the possible profit, you need to understand how to correctly calculate the income from renting an apartment/house.
The crisis, which Spain has recently experienced, turned into a long decline in property prices for the country. The situation has stabilized recently. But the Catalan crisis again forced prices to go down because of the instability of the situation in the country. With the delivery of real estate for rent, the profitability of gross sucks up to 4%. As for the prices of services, from € 300 to € 500 per year, you will have to pay for the territory, you will have to pay separately for security, garbage collection, cleaning, lighting - this will cost from € 500. The utility will take from € 100 to € 200 a month for a two-room apartment. Also, you will need to make an annual tax. Plus you will need to pay taxes for the delivery of the object to the local budget (the interest rate varies from region to region). For illegal surrender can be fined € 30,000.
Rental housing in Bulgaria brings no more than 4% per annum. After all, you will have to spend money on the services of the management company, taxes, repairs. Real estate agencies give such information on the delivery - an apartment costing about € 50 000 in a resort area with one bedroom will give a gross around € 3600, and clean on hand - about € 2500. € 80 will have to be paid for a communal apartment, from € 120 the municipal tax will be met and from € 300 the income tax, and the commission of the management company of the apartment building will be at least € 400. If you choose a private house as an object for investment, if the location is successful, the property will grow both seasonal revenue and expenses.
You should keep mind that the Bulgarian market of resort real estate has experienced a wave of high demand, which turned into a large number of developers who entered the market. As a result of the proposals, so many apartments have become cheaper. There is a risk of acquiring an object for a price that will seriously decrease after a few years. So, in the case of a sale, you will lose some of the investment. The average price per meter is from € 700.
Georgian developers are on the rise. The profit from renting an apartment can bring about 5-7% per annum, and on a private house in the seaside zone and all 10%, since such proposals are still the deficit. At the same time utilities for the apartment will cost from $ 30 to $ 100 per month, depending on the season and the level of consumption. And the payment for the maintenance of the facility, in most cases, or absent, or at a level of about $ 10 per month. But if it is a question of elite objects, the prices for service and, accordingly, the profit will be higher. The average price of real estate per square meter in Georgia is from $ 500 and above, depending on the location and status of the object. You can apply for a residence permit, but this is not necessary - there are soft migration norms in the country and can be found there 365 days a year.
When renting a house in Montenegro, you need to pay a temporary tax, the amount of which will be determined by the tax. This is € 98 for non-working in Montenegro officially and € 68 for employees monthly for a maximum of 15 beds or 7 rooms rented. The cost per square meter is from € 1200. For the purchase of real estate you also need to pay a 3% tax once, and then an annual - in the amount of 0.6% of the value of the object. The cost of utilities will cost from € 100 monthly depending on the size of the facility and the city. The management company will have to pay from € 1.5 per meter per month. Residence permits are granted to anyone who has purchased a property.
The maximum possible yield from leasing is 4.5% per year.
In Cyprus, you will have to pay from € 100 for utilities. For the maintenance of the facility, you will have to lay out about € 600 in the partnership of owners annually and € 150 for garbage disposal. Plus you will need to pay for cleaning and other services. Yield from the delivery will be from 2% to 4% depending on the object. The tax for delivery varies from the level of income. If the income is less than € 19,000 a year, then you do not need to pay tax, if more - you will have to give the state from 20% to 35% depending on the amount of income. If you plan to hand over the management company, they will take 20 to 30% of the revenue. When selling real estate will have to pay a capital gains tax, in the case of making a profit. It will be 20%. The square meter will cost from $ 1100.
In Turkey, the situation was drastically changed by the new law of 2017, which prohibits the daily rent of apartments by individuals. The market of Turkey is already satiated, there are a lot of objects. Now foreigners who bought themselves a seaside object for rest and surrender lost the opportunity to earn on a daily rent. To earn on objects now can only the specially registered companies managing apartment complexes and apart-hotels. If the company breaks the rules of surrender, the owner will bear the punishment. Initially, you will have to pay $ 2,300. Repeated violation - greater penalty, deportation if the owner is not a resident, and sealing the real estate. Another violation - a criminal case and, possibly, a prison. The only option to earn on delivery in Turkey - to rent an apartment for a long-term lease or to purchase in a complex and to pass through the company. In this case, you can get up to 4% per annum under a guaranteed contract, including taxes.