Is it possible to break the stereotypes of the market and the real estate industry to get projects at a level where an investor can get at least 70-80% profit of the capital money. Not only it is is possible, but we are already doing it, applying in practice many principles and concepts that did not exist on the market before us. In this article, we will reveal how to achieve this and make it a reality in the luxury real estate. Unconventional ideas bring unconventional solutions. The great Einstein said, "There is always such an ignoramus who does not know that much in life cannot be achieved by definition. That's what makes discoveries."
CONTENT:
Investment of Stereotypes
New Investment Strategies to Get High Profit
How we are going to do it
Investment of Stereotypes
The market in Marbella has many offers, touting the purchase of real estate as the most profitable investment. As a rule, it is homes from 1.5 million and above in the segment of the so-called luxury real estate. All these proposals are accompanied by extensive reports of reputable real estate agencies with evidence that the property is only growing in value, and, therefore, investing money in a seaside homes is not only safe, but also extremely profitable.
All this is partly true, with one small exception. The market is guided by averages. There is nothing unique about it. The price of property depends on the economic situation on the market. In times of economic crisis, it always falls, then as the economy recovers, it rises.
These waves and circles on the water are endless. But we are not interested in this question. We are interested in the real estate when the value is immune to these fluctuations. We focus on those with the terms of growth in value without the influence of the market.
Look at what is left as the architectural heritage of the past and what has not only retained its value, but increased it many times over and their uniqueness is undeniable. Due to their uniqueness they are single offerings in the market. And that kind of the market is extremely small. Such properties are transferred from one owner to another and eventually stand the test of time. They are born as the historical objects of both residential and commercial real estate.
The conclusion suggests itself. If the market has an offer of such a level, then the investment is truly unique and a win-win. Offers can be counted on the fingers. Unique real estate is always in price and always in demand not only on the local market, but also on the global market. As a rule, such offers are the ones without wide advertisement. Information is distributed through exclusive channels. In order to understand how uniqueness is created, let's dwell on some explanations of what generally happens in the luxury real estate market. The market is ruled by stereotypes. It regulates everything and everyone! Luxury today is reinforced concrete boxes, glazed on all sides to enhance the views, in the style of the so-called "BOXES". The difference is only the number of square meters, location and finishing materials. The main thing is the views of their windows, cleanliness of forms and following today’s tendencies.
Most of the proposed property with prices of villas from a million and a half Euros is a luxury category. The market dictates those.
Following these stereotypes, what is the rate of return for developers in this sector? 15-20% maximum.
And what is the perspective for the buyer? What will happen to the value of the property in 10 years, and in 20 or 30 years? I'm not referring to the natural increase in the value due to inflation. I'm talking about the real value compared to the new properties on the market to appear in those time frames. Will it still be in the luxury category and will its value persist?
I don't think that will happen. In addition, decorating opportunities will diminish. Rising energy prices and the perfect storm that threatens the global economy as a whole are already making a lot of things simply unaffordable for the building and decorating industry. European factories are losing skills in the face of sharply declining demand and rising prices. This means that sooner or later, luxury will once again remain a minority fiefdom, and the world will slip even further into global industrial design.
Given such trends, we come to the following conclusion. We need to remain in a niche offering a true luxury, not fictitious stereotypes. This niche is narrow and difficult. It requires experience and talent, but it is the only one that gives investment opportunities that go beyond these stereotypes when we may create not only timeless real estate, but also provide investors with unthinkable rates of return in such projects: not 15-20%, but hundreds of percent.
New Investment Strategies to Get High Profit
One of our projects is the easiest one for an investor to understand. It does not require a huge investment, compared to other projects. It is a project that can really bring an investor a huge rate of return, due to the uniqueness of the property and the low cost of implementation.
One of the main parts of the budget is decor. To decor we refer the application of materials for facade finishing, interior design and decoration of landscape architectural forms. To create this real estate that falls into the category of uniqueness needs a lot of money. So, this cost effective principle is our know-how. We know exactly how to work with it to make it low.
But not only that!
All investors are always looking for the same thing. It's security for their investment and a high rate of return. How do you make that rate of return several times higher than industry norms? Our answer to that question is the following, and the most important thing here is to understand and feel this fundamentally different approach to determining the sale price.
We can't cut the cost of construction, we can get the cost of decor several times lower than the market, but the most important thing here is the selling price of the property. If we achieve such results, when the market price, in the eyes of the buyer, will be perceived as lower than the price he keeps in his head when looking at the property, we are the winners.
How we are going to do it
1. It's almost impossible to do it when buying an existing property. Market stereotypes will be in effect there. No matter what we do, we won't be able to achieve the main