The weekly tip

In this post, I will try to transfer a little of my knowledge to "how to locate an attractive property for investment correctly".

 

"Real estate value/apartment value is determined first and foremost according to basic parameters of demand and supply, therefore street parking in Boston exceeds the value of a 5 dunam villa on the beach in Thailand."

This correct sentence simplifies a bit the subject of what is the value of the property and how it is measured, but what is important to me as a project leader for my investors is the nature of the project - how profitable the project is.

Sounds pretty simple and it's really not that complicated, but you have to "get out of the box" a bit when it comes to how to locate a really good property.

This is where various parameters come into play that are not fixed in all places and cities and every real estate market will contain almost the same parameters but with a different prioritization/weight.

A simple example on the subject: in city A there is a sea view from the high floors and in city B the view is plain and desert and the high floors are not that significant.

In this example, the weight of the floor - means how much the question - "What floor is the apartment on?" Affects the nature of the transaction differs from city A to city B.

*It is important to note that in paying attention to the weight of that measured parameter, the marketing price of the property should not be considered in the initial stage of the analysis.

In city A, an apartment on a high floor will have a positive effect on the nature of the transaction, while in city B there is almost no effect on any floor.

The constant parameters whose weight needs to be estimated are varied and numerous.

In Thessaloniki I learned that general parameters such as: population, location and quality of an apartment are very important in their weight and I broke down the above parameters into parameters in order to correctly and accurately choose my transactions.

Sub-parameters that are important to prioritize in the real estate market in Thessaloniki, student employment and study areas, apartment furniture, preferred accessories in apartments, most sought-after areas, proximity to public transportation, problematic places in sought-after areas and most importantly - price per square meter, which is actually a huge parameter in a city like Thessaloniki that needs to be explored in order to understand him.

The price per m for apartments that require renovation in the broad center of Thessaloniki (a broad center is not only the center of the city but the entire area of student demand for apartments for rent) ranges from €300 per square meter up to €1,000 per square meter.

The reasons for the gaps are many. For example: Proximity to the sea in the Chin area, the supply there is zero and the demand is high, but on the other hand, despite the best location in the city, I find it correct that other areas are "less in demand" and have more supply, which are much more attractive both in terms of rental yield and in terms of the potential for an increase in value.

On a personal level, after trial and error, I found it appropriate to move away from the tourist center to the northwest and northeast neighborhoods, which are full of students and urban development, and where the prices are much lower. Other areas are "emerging markets" in my opinion.

I'm trying to convey the message - don't look for the highest demand and the lowest supply. Look for a real real estate opportunity that has not yet exhausted itself, because when it exhausts itself, it becomes a property in an area with the highest demand and the lowest supply - meaning, incorrect prices for investors like us who are looking for the real maximum.

The real opportunity will be revealed with the help of correct use of the parameters and their weight and the right deal can definitely be street parking and not a shiny villa.