Tuesday, June 29, 2010

Moscow Real Estate Investment - Why You Should Consider It

Moscow Real Estate Investment - Why You Should Consider It By Sacha Tarkovsky

Investing in real estate in Moscow could be the best investment you can make, and not in the long term but short term double digit gains are easily achieved.
Moscow 2007.
It is one of the most unique and exciting cities in the world - 17,000,000 souls live in a sprawling metropolis, seeped in history, seat of power of the Russian Federation, and home to 0ver 90,000 US Dollar millionaires, most of them under 50 years of age.
The Two Markets
The two Moscow real estate markets (residential and commercial) are indeed separated, but the profits possible in either market approximate each other.
For residential the greater part is composed of large apartment buildings, some of them with thousands of apartments within.
There is a smaller single home dwelling (often referred to as cottages, or dachas) which nevertheless can be built relatively cheaply compared to the sales price.
For the commercial market, there are new office buildings being built literally everywhere in Moscow, as well as shopping centers and industrial buildings.
The Opportunity
A simple visit to Moscow could convince the great skeptic that the construction boom is not even partially saturated.
The rents for either market do not yet approach London, but are closing very quickly.
The market is liquid, and there appears to be equally eager buyers and sellers. One can buy either independently, within a group, or fund. The returns have been more than impressive, and continues at a rapid rate
Why Moscow?
Moscow is a city of the future. Future is all about Moscow.
The population is young, growing, and highly educated.
The demand for both high quality commercial and residential property is unequaled in any European city, or any city for that matter.
Moscow resembles Hong Kong in the 1970s, London in the 1980s, and Los Angeles in the 1990s.
The political climate is more than stable, the laws and taxes have been adjusted to insure ownership continuity. The banks are learning the value of mortgage finance, and interest rates are becoming competitive.
How to Invest
Like any prudent investor one should see the lay of the land.
A week's trip to Moscow can reveal much.
The major real estate companies (all of them) are resident in Moscow and provide a comprehensive viewing of their properties.
They can also reveal the local laws and regulations by which any investor and investment are regulated. It's worth a visit. Moscow is alive and well and literally never sleeps.
How Much to Invest
This is a very subjection question. A 100 square meter apartment in Moscow can cost from $200,000 to $300,000 if purchased correctly as construction is about to start.
The sale of the same apartment in one year can at the moment find exceed $600,000 and even approach $1M.
It will not be difficult to make such an investment. One needs a real estate broker, a lawyer, and perhaps some personal assistant to translate and help you with local transportation.
Such a person is not difficult to find.
For larger and more impressive investment, consultation with the larger and well established real estate agencies can save you time, money, and later headaches.
Their specialists are on hand to guide you through the purchase process. For the larger investments, the multi-national real estate agencies (and they are all in Moscow) are your best bet.
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