2021-09-20

Stock Markets Vs Real Estate Investments

Stock Markets Vs Real Estate Investments: What Is Better To Invest In 2021?

Many people with money think of investment activity. There’re various ways to invest money, and sometimes it’s difficult to make the right decision. It gets even more complicated in the current situation when COVID-19 hits many sectors.

Among diverse spheres to invest in, businessmen are more interested in real estate and stocks today because they can help them earn lots of money. In our article, we will observe the peculiarities of stocks and overseas real estate investing and find out, what is really worthwhile.

The issue of investing in stocks

Any kind of investment has its pros and cons. Stocks have been one of the most popular directions for money investments. However, COVID-19 changed the tendencies a bit. Many people started to take their money off various industries due to the lockdown. The stock market became incapable of bringing good returns anymore.

When you purchase stocks, it means you buy a piece of a certain firm. The returns can be obtained from dividends and as a result of the increase of the company’s stocks. However, stocks are nearly never something tangible. You buy them and can’t predict, how the situation will develop.

There’s a reason for investing in stocks when the returns are additionally boosted by the definite benefits, which are not always present (especially in the current conditions). Thus, the ROI is in most cases lower than expected (not to mention great risks of fluctuations).

Get started with DGY Investments

If we compare the returns from stocks and real estate (just looking at the situation in general), we can see that until 2020, both of them were going more or less equally with certain rises and falls from time to time. However, with COVID-19, the real estate market appeared to be way more successful! After the great fall in 2020, it managed to grow by 321% on some markets, while the stocks figures reached just 234% on most successful markets. And there’s still uncertainty about the following development of the situation with stocks.

Besides, it’s recommended to remember about risks stocks are liable to market, economic, and inflationary risks. Another huge drawback is the absence of tax benefits, which are offered for investing in property abroad (many countries offer tax deductions when investing in real estate).

International real estate investment

Even with more work required, today buying real estate abroad or within your country is a good idea due to the following advantages:

  • Tax benefits (in the majority of countries, they were improved or prolonged to boost the industry during the pandemics)
  • Passive income from rent
  • Protection against inflation
  • Ability to leverage through renovating and flipping.

To get more profit from your activity, it’s advisable to think about overseas property investment. There’re countries and regions, which are more beneficial and can bring you more money in a short time. Besides, it’s recommended to consider your budget beforehand and take the maintenance and purchase-connected expenses into account.

Where to invest in foreign real estate

To make it clearer for you, we present the data published in the Property Index of 2021. The data was obtained as the result of the analysis of the residential market in various countries. According to the experts, the economic situation in European countries will improve with a 68% probability by 2022, while the influence of COVID-19 on the residential market will be 55% short-term. Besides, there is a 73% probability that the prices will increase in 2022 and the following year even further.

With a great fall in GDP in the Eurozone in 2020 (-6.8%), the experts predict its growth by 4.5% by the end of 2021. The prices for new houses grew in several countries with the highest costs in:

  • The UK: grew by 3.36% with over €4,000 for 1 sq. m on average
  • France: by 3.9% with €4,420 for sq. m
  • Austria: by 5.84% with €4,450 for sq. m
  • Germany: by 10.81% with €4,100 for sq. m.

There’re still countries, where prices grew but they remain on a low price level (less than €1,500 for 1 sq. m):

  • Bosnia and Herzegovina
  • Bulgaria
  • Serbia
  • Romania
  • Croatia
  • Ukraine
  • Slovakia
  • Poland
  • Latvia
  • Hungary.

For instance, the average price in summer 2021 in Kyiv reached about €1,150 for sq. m (for a one-bedroom apartment). 1 sq. m in 2- and 3+ bedroom apartments is more expensive. Compare these figures to ones in the capitals of other countries:

  • London (the UK): over €12,000 for 1 sq. m on average
  • Paris (France): almost €7,500 for sq. m
  • Rome (Italy): almost €3,000 for sq. m.

The rent in the Ukrainian capital totals (around, on average):

  • €11 for a 1-bedroom apt.
  • €13 for a 2-bedroom apt.
  • €22.5 for 3+ apt.

With a small difference in prices, it’s better to buy real estate abroad having 2-3 bedrooms and find a renter to get faster returns (in Ukraine, for instance). More people come to Kyiv to rent an apartment rather than to buy it right now and for investors, it is much more alluring to invest in Ukraine than in Western European countries.

However, to reach success, it’s necessary to consider a language barrier, different customs, culture & work attitude, tax laws & legislation. There are many challenges such as bank fares, the necessity to carry out property market research and create connections with contractors, lawyers, and other specialists. To avoid problems and start getting income as fast as possible, it’s possible to cooperate with an experienced company, which can help with investment activity.

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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.

Property management

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.

Property Renovation

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.

Paperwork

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.

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