New rules for modern investors

We live in times that require new rules to be put in place in many spheres of life – both personal and business. Investing in real estate in Greece is not an exception.

What should investors focus on, when choosing property abroad in the situation, when first the COVID-19 pandemic has swept across the whole world, and now it is followed by a global recession? What rules can you apply to secure a return on your investments?

First of all, one needs to estimate the investment capital. At that point, it’s not advisable to play double or nothing, putting all the funds into one project, no matter how safe it may seem. Even though such an approach is much preferred by aggressive investors seeking quick returns, it is still better to procure a safety net. This allows you to be on the firm ground in case of market fluctuations or even a global economic crisis; wait out the storm and live to see the situation stabilize. Thus, the first rule is: do not invest all of your funds in the hope of high and quick profits.

Today the best choice is long-term investments, for example, development projects that will pay off on completion of the construction and will generate profit afterward. Such projects can be commercial or residential property intended for rent. It is better if such property can be easily customized to changing demand, e.g. transform it from property suitable for long-term rent into a property suitable for short-term rent. This brings us to the next rule: pay close attention to choosing the right location of the real estate.

Nowadays, the location is gaining more importance than ever before. If some time ago it was enough to find any scenic area, for example in a spectacular coastal village, now one needs to approach the search for a location with maximum attention to detail. The rich supply and limited amount make a favorable location one of the success factors of an investment project.

To run an economic analysis is also crucial. Find out in which regions are the biggest needs for the specific type of property that you want to buy. From those regions, where is the highest demand? What is the paying capacity of the potential buyers or tenants in that region? How quick will the investment begin to pay off given the particular characteristics of the region? In order to choose the right location, you need to find an answer to those and a number of other questions, eliminating one by one the least suitable options in order to find the ideal region.

Of course, for a foreign investor, it is quite difficult to assess the specifics of different regions without any external help. Thus, one needs to find a trustworthy and experienced consultant, a real estate market expert. Such an expert can give a piece of good advice as to which regions it is better to consider at the moment, can help find traps and pitfalls, and avoid them. A great partner to this endeavor can be a good standing property development company. Usually, such companies are founded exactly by the real estate market experts. They carry out an economic analysis, look for the best projects to invest in, create their own projects, seek investors for those projects, and they are responsible for the success of the projects, their profitability, and economic growth. In other words, they, no less than the investors themselves, hold an interest in the investment project to be completed and bring profit.

However, the Greek real estate market experts advise anyone, who wants to learn how a successful investment abroad works, to be, as far as possible, hands-on in their first investment project, and fully involved in each of its stages. This will help understand the process, understand the fine points of investing and the peculiarities of the industry, define the risks, and minimize them.

Investments always involve risk. It can be a risk of force majeure, such as the pandemic, or a risk of breaking any of the above rules. At the same time, the risk of choosing the wrong consultant or real estate market expert can be fatal, given that he/she, fur to lack of expertise or other not so evident reasons, can mislead the starting investor. However, even if you have correctly estimated the investment capital, have chosen the right location and have followed each step until the completion of the investment project, the risks can still remain. Yet, they can be essentially mitigated in a well-negotiated investment agreement.