Grandzone Trading LLC on value-add real estate properties

Can European real estate be lucrative with small-scale investment capital and how to make the right choice? Grandzone Trading LLC experts give the answers.

What should be done if there's no large capital available right away but desire to invest into European real estate is strong? Especially when European market is know for relatively high profitability in the investment field. One option is to invest in a value-add project. This term can be described with three words: "buy, fix, sell." Such projects can bring incomparably high income gaining up to 15-20% of the invested capital, certainly subtracting the management fees and local taxes.

There are additional advantages to such projects. A short investment term which usually does not exceed a calendar year. What's more important there's no need to manage the property by yourself. Real estate management services can be surprisingly cheap retaining high quality and Grandzone Trading is eager to help! Our expertise in the field will ensure the desired outcome of every project. The objects are selected and purchased by an assigned personal representative who also structures the deal, supervises and controls financial operations, covers the contractors hiring and sells the property after restoration. The client can take the entire project or participate in collective investing alongside others. The entry budget threshold is €30,000 ($35,300) in the latter.

Not all European markets are equally attractive for value-add projects. Major European cities like Lisbon, Madrid, Warsaw, Bucharest seem to be most suitable for this purpose. Barcelona stands out among its counterparts. New realty is not surprisingly more expensive than secondary housing which is quite common. On the other hand refurbished apartments see an immediate price increase reaching the mark of a comparable new realty, which retains the high growth rate. In addition, there is a shortage of new housing in the city which is partially covered via restoration of the existing buildings.

However, German real estate market is the most promising and reliable for value-add projects. There are several reasons supporting the fact. The first is funding accessibility. Nonresidents can receive half the amount of property price in loans at 1.5% annually, residents - up to 100% at 1% annually. The second reason is the real estate high liquidity and demand. For example, Munich and Frankfurt apartments usually have 20-40 potential buyers each. Lastly, it's high demand for rent. In Germany around 50% of the population rents residential property, Berlin stats in particular show more than 70%. All of this makes EU a very attractive market for real estate investing of pretty much any type.

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