Investment in real property provides a secure mechanism of preserving and augmenting investor’s capital while running a lower risk than investment in stocks or deposit accounts.
Prime Business Group offers several options of investing in property construction projects.
1. Participation in general financing of a project as a strategic investor, with the end goal of dividing the profit in the project’s final phase. In that case, the amount of investor’s profit is determined on the contract fee basis depending on the initial investment amount.
2. Participation in financing as a retail investor, when the goal is to receive profit from resale of the property in the later phases of construction or after the project is commissioned. In that case, the return on investment is about 30%.
For example, an investor purchases a 64.6-sq.m apartment in Paris Residential Complex still under construction at the price of 950 USD per sq.m. After the apartment building is commissioned, the apartment’s market price increases to 1230 USD per sq.m. Therefore, your income amounts to: 64,6×1230-64,6×950=18,088 USD, or 29,5%.
3. Participation in financing as a retail investor, when the goal is to receive profit from leasing the property out after commissioning.
For example, an investor purchases a 64.6-sq.m apartment in Paris Residential Complex still under construction at the price of 950 USD per sq.m. The finishing costs amount to 250 USD per sq.m on average, plus the cost of furniture and household appliances of 100 USD per sq.m. Therefore, the total apartment purchase and renovation cost is: (950+250+100)×64,6=83,940 USD.
The average amount of rent for a similar apartment in a newly-built apartment complex at the French Boulevard is 800 USD per month. Therefore, the investor’s annual income amounts to 9600 USD or 11% per annum, and the investment recoupment period is 9 years.