Investing in renovation: how to make money on Athens real estate
For ten years, property prices in Greece have fallen. At the same time, new construction was not actually carried out. As a result, at the moment prices are low, and there are not enough facilities. These factors led to the investment idea – the renovation and reconception of objects. Specialists of Grekodom Development tell how to make money on it.
Tourism is still a strategic industry for the Greek economy. The number of foreigners visiting Hellas is growing, in 2018 there were 32 million of them. Online platforms are being used more and more actively: only 130,000 objects are rented out through Airbnb throughout the country.
Particular attention – Athens. The Institute of the Greek Confederation of Tourism (INSETE) announced that in 2018 prices in all capital hotels with a rating of more than two stars increased. For the first eight months of 2018, the register of real estate in Athens recorded a growth in the number of real estate transactions by 60% year on year. The average growth of rental rates in the city was 17% per year.
More and more apartments, individual houses and villas in Athens (especially in the city center) are being renovated, repaired and then rented. Such objects are the engines of the local real estate market.
This is a reconstruction of objects, and sometimes even the re-profiling of buildings, which in the current state and status are of no interest to either the owner or potential tenants. You buy such an object, change the “stuffing” and get a restored building with a new appointment. In the current economic situation, the restructuring of offices into housing is more interesting, since residential real estate is rented in Athens especially successfully.
Of course, it plays a major role, because the actual building is easy to change, but the location – no way. It can be argued that most of the objects in the tourist center of Athens are suitable for renovation. In recent years, many office buildings in the center of Athens, once occupied by state institutions, have become empty. In the status of business centers, they will not be claimed. And although such offers are becoming less and less, with the help of specialists you can properly acquire and run a profitable investment project.
Renovation in practice
First, it is important to understand what you expect from the investment and how you plan to operate the building. Depending on this, an object is selected either from the existing base or from scratch. At the same time, a renovation project is being developed; Each option is individual, our architects work on each.
After the choice is made, it is necessary to submit documents to the town planning service in order to obtain permission for renovation. We guarantee that this permission will be obtained even before the transaction, but in fact it turns out later. Obtaining a permit takes from 30 to 40 days, construction work is usually four to six months.
Most importantly, you are buying a property that already has a finished renovation project.
The object is resold or rented – both options are possible. Our company is ready to take care of the sale and delivery. We organize advertising on our own resource, on other portals in Greece, in Airbnb or Booking systems.
Our commission as a seller is 10%. Upon delivery of the object for long-term lease, the cost of the company’s services is one rent per month. We will prepare a contract that will be signed by you and the tenant, send it to the tax office.
With a short-term lease, the management cost is 20% of the monthly profit from the booking. The cost of services includes managing the account, handing over the keys, settling-evicting customers, explaining the rules and controlling the object before eviction, buying the necessary furnishing items.
Income and expenses
The price of the object after reconception depends on the cost: the materials used, the quality of the management company, the image that the broker created for the object, etc. Sometimes it makes sense to keep the updated object for yourself, even for a while: another show the potential buyer along with real income figures. Naturally, in this case, the price rises. If you sell a renovated house immediately, expect that its price will increase by 15-20% compared with the cost of the purchase and renovation.
Location: about 5 minutes from the metro, 15 minutes walk from Syntagma – the central square of the capital.
In 2018, the apartment was purchased for about € 10 thousand, and then renovated. Apartment renovation cost € 9.24 thousand, furniture purchase € 6.80 thousand. Total expenses were less than € 30 thousand.
Apartment for rent for € 25 per day. In the first year, its load was about 60% – a good result.