Earn 40% Upwards by Flipping! Look At Ukrainian Market With Many Real Estate Opportunities
Flipping can be a steady business, which allows many individuals to live and thrive, even growing into companies of various sizes. We’re looking at flipping opportunities of the Ukrainian market and provide some calculations given the available objects.
What is flipping houses?
To flip a house or apartment means to buy one for a lower price and sell it for a higher price in a short term (usually, some months or a couple of years). It is an investment opportunity utilized in many countries and blocs, including Ukraine. It has a difference from buying a property to own and run since the latter approach requires being a landlord, which means dealing with tenants, fixes, taxes, and routine management of a thousand small things. Surely, you could hire a managing company to do all that but that means deduction from your net profit.
Flipping is considered an active investment – compared to passive income like the ones received from:
- Buy and hold real estate as rental apartments (if they are managed by a hired company)
- Holding money on bank deposit
- Having money in stocks and other securities
- Having gold bullions or diamonds lying in your safe.
Unlike all four just mentioned, you will actually be doing much more work to earn on flipping – finding a good property, fixing/finishing/renovating/upgrading/redesigning it, finding a buyer, etc. Even if you do the middle stage by hiring someone, you still spend a lot of your time and effort to find a good object and then sell it. Also, people buying an investment property to rent must be good in a continuous process of management and development of their property, which is just not interesting to many opportunistic investors seeking some quick buck.
Why house flipping is advantageous? What risks and opportunities it has?
In the entire world, flipping usually embraces two possibilities:
- Finding an undervalued or overleveraged property, which has a potential of a better sale price with no or little improvement.
- Buying a newly commissioned object, finishing it to make it suitable for immediate living, and selling it for a better price, which covers expenditures for buying and finishing + profits.
In Ukraine (as well as in some other countries), there is a third opportunity of flipping:
- Buying an object on one of the stages of development or construction when it has a lower price and then passively wait until it gains enough market cost to resell it.
That’s exactly what most Ukrainian investors do! Also, there are ones, which combine the first two possibilities to land on even better profit. In addition, citizens of Ukraine have access to banking financing to buy and hold more than 1 object on the stage of development simultaneously. Unfortunately, there are no wide banking leverage opportunities for foreigners in Ukraine, so they should enter the market of flipping having the entire investment sum on hand (or on a bank account).
Now, let’s quickly review the pros and cons of flipping.
- Fast money
- Potentially safer investment (in collaboration with a local company advisor)
- Many such objects in Ukraine.
- The need to search and analyze objects (if doing it on your own)
- Involvement in passive waiting or active renovation
- Taxes (in Ukraine, you should own property for over 3 years to avoid paying capital gain tax).
Below, we’re exploring what specifically income flipping of the third option could bring in Ukraine.
Some fast calculations for flipping homes incomes
Let’s look at a specific object. On the Ukrainian market, there are many objects under construction every year, even during a crisis. For only the first 6 months of 2021, there were nearly 4.8 million square meters of new residential objects commissioned throughout Ukraine (collectively, detached homes and apartments in many-story houses).
If you’re working with a local professional agency, which finds objects under construction at a good price, thoroughly checks them (for the legality, reliability of a developer and builder, compliance with the requirements and terms of contracted construction, etc.), and offers investors, you will receive easy access to a sheer number of objects under construction.
DGY Investments Company offers exactly such checked objects to their clients-investors, for many years already. For instance, Edelweiss House, located in the heart of the historical Kyiv, Pechersk district. In August 2020, the cost of 1 sq. m of an average apartment was $1,277. By July 2021, it already was $1,851. Only price increase gives above 44% income (as the construction comes to end and commissioning is planned). The same calculations can be made for other portfolio objects of the company. To find out those numbers, contact us now and our managers will thoroughly consult you during a meeting.
Flipping objects is a reliable investment if you’re working with DGY Investments Company, a local market expert. We proudly deliver our clients only highly marginal and reliable real estate objects. Contact us now to set up a consultation with one of our agents and start earning on flipping already tomorrow!
Nov 26, 2021
November 1, 2021, is a black day for many residents of Ukraine. Not only the majority of regions of Ukraine have gone to the ‘red zone’ of quarantine but also it is since that day, all non-vaccinated citizens of Kyiv are forbidden from free movements in the Ukrainian capital. Unvaccinated people can’t use public transportation, malls, publically open venues (like cinemas), or governmental facil...
Nov 19, 2021
Investors in real estate use various rules, which help them organize their business and make the most benefit from it. A 2% rule is one of the main principles, which can be applied by businessmen. With the help of it, it’s much easier to define, whether a property is worth investing in. Today we will observe the issue of this rule of thumb and find out how you can use it in real life. The essen...
Nov 12, 2021
Scanning the market for possibilities of purchasing a house or another type of property, you might have spotted that some objects are marked as “pending” or “contingent”. If you’re interested, what does pending mean when buying a house, this article is for you. Below, we’re considering both “pending” and “contingent” statuses of objects. What is pending in real estate?When you see the ‘pending’...
More about DGY
DGY is a real estate investment and property management company. Our experts have an impressive experience in turning businessmen into smart real estate investors. We collect limitless opportunities throughout the world’s best real estate markets and help our clients implement the best deals. We take care of all due diligence and customize documentation while your income grows. We also provide you with property management services so you can forget about the tiresome maintenance of several objects and entrust this process to professionals.
Investment advice and recommendations
DGY is an investment company that takes care of every client and helps them become successful investors. With the help of an investment experience and a well-thought plan, we will help you examine the market, choose a strategy specifically for you or your business, and calculate future costs to start making money with real estate investment.
In order to invest in real estate, you should consider how you will run your management in Ukraine. DGY will help you eliminate all possible pitfalls at an early stage as a personal project manager will be assigned to your case. They will assist you in choosing the project according to all required objectives.
DGY Investments takes care not only of purchasing property but also renovating an existing one. With the help of a thorough plan and estimating, we will thoroughly prepare a property for sale. Our professionals evaluate an investment property and create a strategy that includes the costs for renovation, possible taxes, fluctuations on the market, etc. Therefore, our clients are able to resell the renovated properties in Ukraine with more than 15-20% profit from the initial price.
Before our clients decide to deal with real estate investing, they consult with our experts concerning details such as the necessary documents needed to purchase a property and successfully run all the processes connected to it.
Therefore, if you are eager to invest in Ukraine, it’s essential to have all the paperwork done correctly, and that’s the moment when our team of experts takes care of this step. DGY Investments helps investors buy real estate property, manage the paperwork, start preparing relevant documents for purchasing realty in Ukraine, and close the deal successfully.
Real estate investment opportunities in Ukraine
When an investor decides to invest in real estate in Ukraine, the most affordable way to attain stable passive income is through buying residential real estate. Investors can expect to receive a regular monthly payment from their tenants at a fixed monthly amount, unaffected by inflation or other unforeseen circumstances. The amount of rental income will vary depending on the size, type of property and location. For example, buying an apartment in Ukraine’s capital Kyiv is beneficial to investors due to offering a large working population, central location and affordable prices. Hence, the minimum price of renting a decent one-bedroom apartment in Shevchenkivskyi District will be around $1000 per month in 2021, followed by Pecherskyi District with a cost of $850 per month. Besides, investing in real estate in Ukraine annually brings clever investors up to 15% of yield, attracting many business people every year.
Properties for investments in Ukraine
Ukraine has a giant sector for real estate investing. Businessmen who come there all over the world often choose between investing in residential and commercial properties. The main advantage of buying property in Ukraine is the affordability of prices on the houses and apartments. For instance, if you invest in real estate in a historical district, a luxurious apartment will cost you around $80k only.
How to invest in Ukrainian Real Estate
In order to invest in Ukrainian real estate, you should take into account a list of crucial factors. The first one is to choose what kind of realty you are going to invest in: residential or commercial. It is vital as it should comply with Ukrainian real estate law. The second tip is to identify the purpose of purchase in order to make a strategy for the property. For instance, you may purchase the property for your own use or buy it for lease. The next step is to calculate the taxes and what kinds of taxes are payable during the purchase, owning, or selling. Also, to invest in real estate properly, you should keep in mind currency control rules in Ukraine to sell a property and get a higher profit.