Types of investment in real estate

Investing in property is a proven way to multiply your capital, but choosing the right type of investment can be crucial to your success. There are several options available on the market, ranging from primary and secondary market flats, commercial premises and bailiff auctions. Each of these types of investment has its pros and cons, which are worth considering before making a decision. Below, we provide a detailed analysis of each type of investment and explain why primary market housing is the best choice.

1. Primary market flats

Pros:

• Modernity and no hidden defects: Primary market flats are new, which means no costly renovations. In addition, developers provide warranties on new units, which protects the investor from unforeseen expenses.

• High potential for value appreciation: New flats are often built in developing neighbourhoods, where prices can rise faster than in older locations. In addition, attractive infrastructure and modern amenities attract buyers and tenants.

Cons:

• Higher purchase costs: New flats typically have a higher starting price compared to secondary market flats. However, this higher price is often compensated by a much more predictable renovation cost estimate and potential.

• Waiting time for collection: Investing in the primary market often involves waiting for construction to be completed

2 Secondary market housing

Pros:

• Immediate availability: Secondary market flats are available immediately, allowing you to start renting and generating income quickly.

• Lower purchase costs: Prices of secondary market flats are usually lower than in the primary market, which can be beneficial for investors with limited budgets.

Cons:

• Renovation costs and hidden defects: Secondary market flats often require very costly renovations, which increases the total cost of the investment. In addition, there is a risk of hidden defects, which may involve additional expenses.

• Lack of guarantees: Unlike the primary market, the lack of developer guarantees means that all defects and problems are the responsibility of the owner.

3. Commercial premises

Pros:

• High rental rates: Service premises can generate higher rental income than flats, especially in attractive locations.

Cons:

• Greater sensitivity to the economic situation: Service premises are more vulnerable to changes in the economic climate. During a downturn, companies may close their operations, leading to difficulties in finding tenants.

• Higher maintenance costs: Maintenance and repair costs for commercial premises can be significantly higher than for flats, which can reduce the profitability of the investment.

• Quick turnover of such premises is generally very difficult

4. Bailiff auctions

Pros:

• Attractive purchase prices: Dwellings bought at bailiff auctions can often be purchased well below their market value, offering great profit potential.

• Quick profit on resale: Investors can quickly resell a property at a profit, especially if it was purchased at a bargain price.

Cons:

• Legal risks: Auction properties often have a complicated legal situation, such as mortgage debts or tenants difficult to evict, which can generate additional costs and delays.

• Lack of opportunity for a thorough condition check: Before buying at auction, it is usually not possible to inspect the flat thoroughly, which increases the risk of buying a property with hidden defects.

Summary: Why choose the primary market?

Of all the options discussed, investing in primary market flats seems to be the safest and most profitable. New flats provide investors with modernity, no hidden technical problems, and developer guarantees, which minimises risk. Although their starting price is higher, the value of such flats is rising rapidly and modern amenities attract attractive tenants. For those looking for a stable and predictable source of income, the primary market is the best choice.

Feel free to contact our team to learn more about investment opportunities in primary market properties - with us you will invest safely and profitably!