Video: Investing In Real Estate: Troublesome But Profitable
2023 Author: Douglas Hoggarth | [email protected]. Last modified: 2023-11-26 20:16
It's no secret that real estate transactions are a fairly profitable way of investing money. How to profitably use the property that is owned? Which one to give preference to: selling the building or renting it out? What to look for when drawing up a sales or lease agreement? M2 lawyer answers these questions. First, let's look at ways to make a profit from real estate. The easiest option from a legal point of view is the construction of a building with the subsequent sale. Simple because there is no need to check the legal "purity" of the object. In addition, buyers prefer to deal with the first owner, if he turns out to be a developer - even better. True, there are difficulties. For example, you first have to find a significant amount needed to conduct construction,- it can be either a bank loan or investors' funds.
Some people want to get everything at once …
Most of those who make money on real estate operate according to the scheme: built - designed - sold. The bottom line is that a construction company, having erected a building, sells it ready-made to interested parties. When concluding a contract for the sale of real estate, the parties need to track whether the location of the object is indicated correctly, whether floor plans and documents for the land plot are attached to the contract. It is also necessary to carefully measure the room and indicate its exact area. If we are talking about a part of a building, it should be noted on the floor plan which part will be sold.
Having collected all the necessary documents (with copies), you can go to a notary. Most likely he will only be interested in the sales contract. After registration of the transaction with a notary, its state registration should be carried out. The list of documents required for this can be clarified at the place of registration. In any case, you need to stock up on three copies of the sales contract (one for each of the parties and for the registering authority). Also, notarized copies of the agreement and all constituent documents will not be superfluous.
documents of the parties. After payment of the state duty and registration of the contract, the transaction can be considered completed.
The object itself is transferred according to the act of acceptance and transfer, where the date of transfer of the building and its condition must be indicated. If the parties have claims to each other related to the quality of the object or its payment under the contract, this must be reflected in the act.
In addition, there is a period during which the seller is obliged to guarantee the quality of the goods to the buyer. But in fact, if, for example, a building collapses and an expert examination shows that the designers or builders are to blame, they will be held liable. If hidden defects are found, buyers will also contact the seller.
-And some - in parts
Owners who, instead of a large lump sum, prefer to receive relatively little money every month (year), rent out the constructed building. The demand for all types of commercial real estate (offices, retail premises, warehouses, etc.) is now quite large, therefore, as a rule, by the time the object is put into operation, all premises are already distributed among tenants.
When registering a lease, it is required to correctly draw up a contract. What should this document contain and what points should you pay attention to when signing it? It is imperative to check whether the details of the parties are indicated correctly: names, addresses, TIN, bank details, passport data (if the party to the agreement is an individual), etc.
An important element of the lease agreement is the act of acceptance and transfer of the premises, attached to the agreement. In it, you must indicate the state of the room at the time of transfer and note which communications are connected and functioning (telephone cable, water supply and sewerage, heating network, etc.).
The next important point is rent, the amount of which must be negotiated by the parties in the contract. It can be calculated for 1 sq. m per year or for the entire premises per month. In addition, you need to fix how the payment will take place: if in rubles, then the size of the rental rate is indicated, if in dollars or euros, then it should be noted that settlements are made in rubles at the rate determined by the parties. Most often it is equated with the rate of the Central Bank of Russia. When determining the amount of rent, it is necessary to indicate whether it includes utility bills. In some cases, the lessor reserves the right to issue separate invoices to the tenant for basic utilities and additional services, which, for example, include garbage collection, telephone communications, the Internet, etc. In order to avoid misunderstandings in the contract, it is advisable to clarifythat the transfer of premises for rent does not constitute a transfer of ownership of it.
When a lease is concluded for a period of more than one year, it is subject to state registration. Considering the fact that the demand for commercial real estate is currently quite high, as well as the fact that a number of tenants enter into a long-term lease agreement, the registration authorities in Moscow have created a special "window" in which all contracts can be submitted for registration. However, an official will not accept more than 10 cases (separate agreements) at a time, so it will be difficult to register more of them at the same time. Therefore, many organizations place the responsibility for registering long-term lease rights on tenants. If the parties do not want to go through this procedure, they can conclude a contract for a shorter period and provide for the possibility of its extension. In addition, it is possible not to indicate the term at all in the lease agreement:in this case, it is considered indefinite and does not require registration.
If you intend to lease retail space and warehouses at the same time, it is advisable to conclude one contract for both premises. Moreover, the contract must indicate exactly where the pavilion will be located and where the goods will be stored.
What is more profitable?
So, should you sell the building or rent it out? Each case has its own advantages and disadvantages. The sale allows you to gain a significant amount at a time; when renting, the investment will pay off gradually, but the building brings a stable income.
Issues with registration of your rights will have to be resolved in any case. The only difference is that when registering and registering a long-term lease, you will have to pay a fee (it is also charged when you make any changes or additions to the contract). Don't forget about taxes.
In any case, if the building is owned, it can be sold or mortgaged. Moreover, the pledge will not affect the relationship between the lessor and the tenants, because as long as the building remains in the ownership of the lessor, all rent payments will go to him, as before.
It's hard to say which is more profitable from a business point of view. Any real estate is an invariably liquid asset that can always be sold.
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