How to avoid risks when investing in foreign real estate?

Investing in foreign real estate

In the field of international investments, a prominent expert is Christian Kaluzha, who is the founder and CEO of Opisas. Often, no investor seeks losses. However, at the early stages of planning investments in foreign real estate, it is crucial to understand that such investments, like many others, come with their own risks.

Investment management

To achieve success in investment management, it is essential to carefully weigh potential threats and avoid mistakes that could significantly negatively impact the final results of your financial investments. My recommendations are based on practical experience, as our company has been operating in this market for over 12 years and has dealt with more than 3,800 properties.

Our business model

Our business model differs from the conventional approach: we don't just resell properties like traditional agents do; we are the owners of investment real estate ourselves. This means that we initially invest our own funds and then offer potential buyers ready-made solutions.

Search and management of objects

We focus on finding properties with high income potential, carry out the necessary renovations, and then hand them over to partners who specialize in selecting reliable tenants. An important part of our approach is that we only choose properties in which we are willing to invest our own money.

The process of buying real estate

The real estate we offer is ready for immediate use. This allows our clients to start generating income from the very first day of ownership. Typically, the process of acquiring property is quick: the transaction can be completed within 30 days. The client first needs to sign a reservation agreement, then move on to the purchase and management agreements, and finally sign the closing documents. As a result, they receive a confirmation deed for the acquired property.

Protection of the buyer's interests

The protection of the buyer's interests is ensured at all stages of the transaction, as all financial resources are transferred to an escrow account held by the title company, which bears full responsibility for the deal. It should be emphasized that even in times of crisis, real estate in the United States can be profitable.

What an investor needs to know

What are the important aspects that an investor should consider when dealing with foreign real estate? At every stage of the investment process, you will need to navigate a multitude of economic, legal, and technical factors. For example, foreign investors entering the U.S. real estate market may not be aware that property purchases can be made not only in the name of an individual but also through a legal entity.

Creation of a legal entity

To avoid this, it is advisable to consider establishing a company, such as an LLC (Limited Liability Company), which will open up new opportunities. This approach will help:

• Limit financial liability;
• Divide the assets;
• Simplify the process of transferring ownership rights;
• Maintain necessary confidentiality.

Investing in foreign real estate can be not only highly profitable but also safe if approached wisely.

Financial planning for tax savings

An important aspect to pay attention to is that the correctfinancial planningFrom the very beginning, it lays the foundation for significant tax savings. For someone unfamiliar with the intricacies of investing, it can be challenging to navigate all the nuances related to real estate investments on their own. Therefore, it would be wiser to turn to professionals who possess the necessary knowledge and experience to help minimize the risks that threaten your capital.

Choosing the right organization

Finding common ground with an organization that truly understands your needs is incredibly important. This can be either a small investment fund or a large financial company. Professional staff typically offer a wide range of services to support you throughout the investment process.

• Solutions for legal, tax, and immigration issues
• Creation of legal entities in the USA
• Customer support in the native language
• Detailed monthly reports
• Tips for exiting investments to increase profits

Challenges in investment management

Investment management iscomplex processFor an ordinary person who divides their time between work, family responsibilities, and leisure, this can become a real challenge. The desire to manage one's assets independently can lead to additional expenses and stress.

The role of professionals in property management

Real estate management professionals take on a multitude of tasks:

• They are engaged in advertising properties to find tenants.
• They are selecting the most suitable candidates from among the numerous applicants.
• They are checking the condition of the property.
• They cover the payment of utilities and other necessary expenses.
• They are organizing the transfer of rent payments to the owner's bank account.
• They provide the necessary repairs and general maintenance of the facilities.

They also provide the owner with monthly reports and perform many other significant tasks. The cost of such services can vary depending on the specific agency, type of property, and rental conditions. For example, for properties in Orlando that are rented out long-term, the management fee can range from 8% to 10% of the rental amount.

Examples of real estate in the USA

Let's consider a few examples of real estate in the USA: three-bedroom apartments in Chicago, with an area of 112 square meters, which are furnished and conveniently located in the city center near a subway station, are offered for sale at a price of $100,000. These examples highlight the diversity and potential for investing in real estate, emphasizing the importance of professional management and smart planning to enhance the effectiveness of your investments.

Overview of taxes and real estate rental in Miami

The property tax in Miami is2300 dollars a yearAnd that's great, as there are no mandatory monthly management fees (HOA). As for renting, there are no restrictions, which makes the market more flexible for tenants.

The cost of long-term rental

Long-term rental prices for real estate in this region range from1500 to 2000 dollars a monthLet's consider some proposals:

• First apartment:

  Price -353,070 eurosThe area is 60 square meters, with 2 rooms, 1 bathroom, and 1 toilet. Online viewings are available, and there is an option for a remote transaction; payment can be made in cryptocurrency or through financing.

• The next apartment:

  Cost -356,739 eurosThe area is 50 square meters, with 2 rooms, 1 bathroom, and 1 toilet. Online viewings are also possible, and payment can be made in cryptocurrency or by credit.

• Third apartment:

  Price -357,656 eurosThe area is 73 square meters, with 2 rooms, 1 bathroom, and 2 toilets. Payment can be made through credit financing.

• Fourth apartment:

  Cost -357,656 eurosThe area is 80 square meters, with 2 rooms, 1 bathroom, and 2 toilets. There is also the possibility of arranging a loan.

• Fifth sentence:

  Price -359,490 eurosThe area is 130 square meters, with 4 rooms, 3 bathrooms, and 2 toilets. Payment can be made through a loan.

Assistance with purchasing real estate

If you are interested in any of the apartments mentioned above or have questions about the real estate market in Miami, I am always happy to help. I am ready to provide support in purchasing residential or commercial properties in this sunny city. My experience covers both new developments and resale properties.

Thank you for your attention! If you need assistance, feel free to reach out! Your realtor, Dmitry Baranov.+1.305.302.9776Square Estates LLC.

Thank you! My name is Dmitry Baranov, and I work in the real estate sector. My contact phone number is +1.305.302.9776. I represent Square Estates LLC.

Real estate listings in Miami

At the moment, we have interesting apartments for sale located in picturesque Miami, with a total area of 130 square meters. The price of these apartments is241,362 €Inside, there are three bedrooms, two bathrooms, and there is also the option to arrange a mortgage for the purchase. If you have any questions about this property or the real estate market in general, feel free to reach out to me! I would be happy to assist you in choosing both residential and commercial properties in the wonderful Miami.

Other interesting objects

We also have an attractive loft in Miami, with an area of up to 110 square meters. Its price is365,909 €In this space, you will find three bedrooms, two bathrooms, and one parking spot, as well as the option to obtain a loan. If you are interested in this property or want to learn more about other options, just let me know!

In addition, I will provide information about the price level in the real estate market. You can contact me via any messenger at the number +1.305.302.9776.

New proposal

I also have a new offer for you — a small apartment in sunny Miami with an area of just 37 square meters and a price366,826 €This compact housing consists of one bedroom and one spacious bathroom. An online viewing is possible, and the transaction can be conducted remotely.

Ultra club E11even

I can't help but mention that near Miami is the ultra-club E11even – it's a unique establishment with a total area of20,000 square feetIt operates around the clock and without days off, and impressive events are constantly taking place here. In the club, you can meet world-class artists and enjoy performances by acrobats and dancers. This establishment combines elements of a circus show and a theatrical performance, creating an unforgettable atmosphere.

Additional suggestions

Another interesting option is a loft with an area of90 square meters, the price of which is371,412 €It also has three bedrooms, two bathrooms, and a parking space. If this offer interests you or if you would like more information about other options, just let me know!

Moreover, I am happy to offer you a townhouse in Miami. Its area is110 square metersIt includes three bedrooms and two bathrooms. The cost is375,997 €If you have any questions about this property or other offers, I am always ready to consult you.

Apartment in Brooklyn

In addition, we have an apartment in Brooklyn, USA. It occupies38 square metersand it costs389,753 €This is a spacious studio with one bathroom, located in a beautiful area in Park Slope, filled with natural light and the charm of modern living in Brooklyn. The apartment features floor-to-ceiling windows with triple glazing, as well as white oak finishes and modern technologies like a smart lock. If you need detailed information, feel free to reach out, I would be happy to help you!

Thank you, Dmitry Baranov, real estate broker, number +1.305.302.9776.

Hello! I am glad to welcome you and tell you about the wonderful opportunities in the real estate market in Miami, Florida. If you have any questions about specific properties or want to learn more about the current state of the market in this region, feel free to contact me. I am ready to assist you in acquiring both residential and commercial properties in this magnificent sunny city.

Available real estate properties

Let me present a few interesting offers. In particular, we have an apartment with a total area of 90 square meters, priced at 389,753 euros. It is located in the very center of Miami and consists of three bedrooms and two bathrooms. There is also an option to obtain a loan to finance the purchase of this property.

Another notable property is a corner apartment with an area of 144 square meters in the Winston Towers project, priced at 395,601 euros. This apartment stands out with its stunning panoramic views of the ocean and cityscape, located in the picturesque area of Sunny Isles Beach. Recently, new appliances were installed here, including:

• dishwasher,
• microwave oven,
• a stainless steel plate.

It is also worth mentioning the recent renovation, new tinted windows, and upgraded plumbing in the bathroom. The apartment is just a few minutes' walk from the beach.

Compact real estate options

For those looking for more compact options, a 45 square meter apartment is offered for 403,509 euros. This property will be available for online viewing, allowing for efficient remote transactions with the option to pay in cryptocurrency. If you are interested in the real estate market in Miami, I would be happy to assist you at all stages of the purchase.

Another interesting apartment with an area of 80 square meters is available for €403,509, which can also be applied for a loan. You will receive comprehensive information on all inquiries, and my team is always ready to answer any questions and support you throughout this process.

Stylish residential complex

Check out the stylish residential complex branded by Diesel, located in the heart of Miami. They offer payment plans until 2025, which makes the process of acquiring residential property much easier. This is a great opportunity for both investors and those looking to become homeowners.

There is also an apartment available with an area of 110 square meters priced at 408,094 euros. This spacious property offers three bedrooms, two bathrooms, and two parking spaces. If you have any questions about this offer or would like to know more about the market conditions, I am always ready to assist you and answer your questions.

Services and support

Don't forget that we have an extensive database that includes both new constructions and properties on the secondary market. We offer online viewings and options for remote transaction processing, making the process more efficient and convenient. My team and I strive to ensure maximum comfort and simplicity for you during your real estate purchase process in Florida.

If you have any questions, feel free to reach out to me, Dmitry Baranov, your real estate agent. My contact number is +1.305.302.9776, and I am also available on various messaging apps. I hope to talk to you soon!

Unique opportunity in Miami

Square Estates LLC is offering an exclusive opportunity to own an apartment on the sunny shores of Miami, USA. This residential property spans 80 square meters, includes two bedrooms and two bathrooms, and is priced at 410,000 euros.

My name is Dmitry Baranov, and my main goal is to assist you in choosing both residential and commercial real estate in this charming city. I offer services for both new properties and the secondary market. If you have any questions about the specified apartment or various aspects of the real estate market in general, feel free to contact me. You can call me at +1.305.302.9776. I would be happy to help!

Risks of renting real estate

When discussing real estate rental practices, it's important to remember that potential risks can significantly impact your actual investment capital returns. Typically, rental income may be affected if:

• The apartment is vacant.
• The tenants are delaying payment.

Moreover, the lack of control over repairs and the provision of necessary conditions can lead to additional losses. However, such risks can be minimized with proper management of the facility.

Tenant selection

To reduce the downtime of the premises, it is essential to carefully select tenants. Experienced managers will conduct a detailed analysis of the candidates' financial situation, checking their:

• credit histories;
• evictions
• other information related to previous transactions.

These measures will help eliminate unsuitable tenants even before the contract is signed.

Regular property condition inspections

Regular inspections of the apartment's condition will help you monitor how tenants treat the property. In case of damages, they will be held responsible for the losses. Given the complexity of managing from abroad, it is advisable to consult professionals who have experience in this field and use proven methods.

Correct investment strategy

When it comes to returns, the right investment strategy can significantly increase your chances of success. One of the most important aspects is creating a balanced investment portfolio. When investing capital, it's important to pay attention not only to annual profit but also to:

• capital growth,
• additional income from every euro invested.

Examples of successful deals

To illustrate, let's look at examples of successful transactions conducted using the Opisas platform, to better understand how to achieve high returns on your real estate and avoid unexpected risks in the future. If this topic interests you, stay tuned, and we will discuss the key points of real estate management and investment in detail.

Investment strategy and acquisitions

As part of our investment strategy, we purchased five real estate properties, for a total expenditure of $498,500 between 2014 and 2019. This calculation does not take into account the increase in rental prices, which has amounted to 11% over the last five years. The annual rental income is $61,080, which is equivalent to a return of 12.3% per year.

After deducting taxes, insurance payments, and management company fees, our net profit from rental income amounted to $46,655, or 9.4% annually.

Financial results

During the ownership period, the total rental income amounted to $233,275. It is important to note that 8% of this income was spent on property maintenance, including ongoing repairs and potential downtimes. As a result, our net income was $214,613.

In 2019, a decision was made to sell the property, after which we conducted calculations. The profit from the capital gain amounted to $93,500, which is equal to 18.8%.

The resale price amounted to $592,000. If we add to this amount the net rental income of $214,613 and subtract the selling costs of $48,020, the total revenue came to $758,593. The return on investment (ROI) was 47.6%, and the earnings before interest, taxes, depreciation, and amortization (EBITDA) amounted to $260,093.

Portfolio examples

Now let's take a look at some examples from our portfolio.

• The first example is a property in Orlando with an area of 968 square feet (90 square meters), which was purchased in 2014 for $100,000. By 2020, its market value had increased to $135,000, corresponding to an annual capital growth of 7%.
• The second example includes two properties with a total value of $191,000: a condominium in Tampa, Florida, for $108,000 and a single-family home in Detroit, Michigan, for $83,000. Together, these two properties generate a gross annual income of $21,240, which corresponds to a yield of 11.12%.

Expenses such as taxes ($2,082), insurance, and utilities ($3,264) result in a net income of $15,894. Thus, the net return on investment is 8.32%, not accounting for any potential appreciation in property value in the future.

Typical mistakes of beginner investors

Additionally, it is worth mentioning the common mistakes that beginner investors make. Incorrect calculations can lead to long-term difficulties in finding tenants and negatively impact overall profitability, and sometimes even result in losses.

• For example, many companies, in an effort to attract attention, announce high returns exceeding 15% per year; however, more often than not, they are referring to gross profit rather than net profit.
• Another common mistake is that inexperienced investors often overlook the costs of property maintenance, which can lead to a significant decrease in profitability and unexpected financial difficulties.

As a result, investors may face a situation where the actual returns turn out to be significantly lower than expected due to unforeseen expenses, or they may struggle to find reliable tenants, which could lead to additional problems in the future.

Conclusion

In concluding my thoughts on the opportunities and challenges of investing in foreign real estate, I want to emphasize that this path requires a deep understanding of the process and careful preparation. Attempting to go without professional assistance can lead to serious consequences that can significantly reduce the effectiveness of your investments or even result in their loss.

I am convinced that establishing a strong partnership with experienced professionals is not only a step towards minimizing risks but also an opportunity to significantly increase your profits. Our company, Opisas, has been helping investors find reliable properties to start their journey in the real estate world for over 12 years. Our unique business model allows us to conduct business transparently and safely, from property search to management and income generation.

Important aspects of investing

• Understanding tax benefits:The formation of a legal entity, such as an LLC, opens up new horizons for you and helps optimize taxation.
• Delegation of management:This allows you to focus on the main aspects of your life without getting distracted by routine tasks.
• Selection of objects:Consider not only the current state but also the prospects for further growth.

The purchasing process may seem complicated, but with the right team and support, it becomes simple and clear.

Recommendations

In conclusion, my recommendation is: if you are considering investing in real estate abroad, don't miss the opportunity to consult with professionals, such as the staff at Opisas. They can provide you with the necessary information and services to help you avoid pitfalls and build a successful investment strategy.

Start your journey into the world of investments with confidence and reliable support, and this path will be much more profitable and less stressful. Your investments deserve the proper attention and care, and I take pride in the fact that my team can assist you with this.