{"id":99718,"date":"2022-02-23T16:47:05","date_gmt":"2022-02-23T12:47:05","guid":{"rendered":"https:\/\/forbes.ge\/?p=99718"},"modified":"2023-05-18T19:20:55","modified_gmt":"2023-05-18T15:20:55","slug":"what-to-invest-in-a-review-of-batumi-investment-proposals-with-a-guarantee-of-income","status":"publish","type":"post","link":"https:\/\/dev.forbes.ge\/en\/what-to-invest-in-a-review-of-batumi-investment-proposals-with-a-guarantee-of-income\/","title":{"rendered":"What to Invest in: a Review of Batumi Investment Proposals With a Guarantee of Income"},"content":{"rendered":"

The development of any real estate market is closely related to its investment attractiveness. It is the presence of investment-attractive objects on the market that determines the dynamics of its development. Batumi, the second most significant city of Georgia, is no exception, the real estate market of which has been developing at an accelerated pace over the past five years.<\/span><\/p>\n

The situation in the Batumi housing market has changed due to the pandemic<\/b><\/p>\n

The active construction of standard apartments and apartments in Batumi has led to record levels: before the pandemic, the municipality of Batumi annually issued building permits for an average of 1,200,000 square meters. For comparison, in all of Lithuania, on average, up to 300,000 m2 were built per year, that is, 4 times less.<\/span><\/p>\n

Of course, such a record pace of construction led to the fact that supply exceeded demand. Demand growth was lower than supply growth, which led to pressure on the market. This, in turn, led to a shortage of capitalization and a surplus of offers for rent and resale. Good indicators of income from rent and capitalization began to be demonstrated by those properties, the demand for which is consistently higher than supply.\u00a0<\/span><\/p>\n

However, this is a common feature of all world real estate markets: those objects that are in demand and scarce in a particular market become more expensive and bring the maximum rental income. For example, in Batumi, there are luxury real estate and villas located in tourist locations.<\/span><\/p>\n

The investment potential of real estate consists of many factors: the location of the object, the quality of construction, the fame and reputation of the developer, the development of infrastructure, and resort real estate – also proximity to the sea.<\/span><\/p>\n

But for an investor who is new to this market, it is often difficult to understand the nuances. For such investors, a significant advantage is the availability of guaranteed rental income offered by the developer or the delegated management company.<\/span><\/p>\n

In the Batumi real estate market, guaranteed income as a concept appeared quite recently and became especially relevant during the pandemic due to the reduction in tourist flows.<\/span><\/p>\n

Investors are showing an increased interest in real estate ownership conditions in which they will not depend on market turbulence, but will be able to regularly receive passive and high income from renting out housing. Therefore, making a choice in favour of the format of truly guaranteed profitability.<\/span><\/p>\n

“I swear on my mother’s life!” or legal obligations?<\/b><\/p>\n

Investors’ estimates of the future profit of the investor are often very optimistic – companies compete in the promises of annual profitability of studio apartments. For example, Alliance palace predicts an income of 10% of the cost of apartments – however, for a limited number of objects. Horizon Deluxe prescribes in the preliminary contract of sale 8% per annum, Seven heaven – 7%, Blue Sky Tower Holiday Inn under the official contract guarantees an income of 8%.<\/span><\/p>\n

However, it is important to understand that since construction has not been completed to date, it is possible to analyze only the stated proposal, which has not yet become a reality. Alternatively, the company assumes clear legal obligations of guaranteed income.<\/span><\/p>\n