What is investment real estate?
25.03.2024

What is investment real estate?

"Investment real estate" is an asset whose primary reason for acquisition is to generate income or profit. Buying real estate is one of the common forms of investing money, when you buy it, you pay a one-time cost of the property and then, if you don't decide to sell it, you get the benefits of it for the rest of your life. Today, the value of real estate in the market is constantly increasing, along with the development of the country's economy, the price of real estate is constantly increasing.

What are the advantages of investing in real estate?

The best way to raise funds

When buying real estate, getting a loan from a bank is surprisingly easy. Interest on mortgage loans remains at a low level, real estate is a solid asset, which leads to high reliability of banks and willingness to grant loans. In addition, the share of income from real estate increases over time, as the amount of loan principal is reduced, which is compounded by the steady increase in rental prices in the long term. Today, if you have decided to buy an apartment and you do not have the required amount of money, you can easily take advantage of a simplified mortgage loan.

The most solid, long-term investment

Buying real estate in Georgia is a long-term investment associated with the lowest risks. The value of real estate is constantly increasing, and benefits can be obtained both with a short-term buying and selling perspective, i.e. by reinvesting in a higher value property, as well as on a long-term rental basis, which is one of the most attractive methods for diversifying an investor's portfolio and providing additional risk-free income. The most important thing is that after a certain period of time, the apartment will recover its value and you will still own it. 

Growing revenues

Along with the development of the economy, the demand for real estate is increasing and the prices are constantly strengthening. Investing in real estate is the best way to insure against inflation, because real estate reacts proportionally to the increase in the general level of prices in the country. If inflation rises, so do real estate and rent prices. Even during a passive economic situation and crisis, the real estate has the least impact on the price decrease. In the long run, your real estate prices increase steadily, ultimately guaranteeing you low risk and high returns.

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Tax benefits

Investing is associated with various costs (repairs, utilities, repairs, transportation and documentation). These expenses allow us to reduce income taxes in the long term. Property tax is levied on natural persons registered as tax payers in the country:

  • If the family income is up to $55,000 per year (equivalent in GEL) - the property tax is 0.05% to 0.02%;
  • And if over $55,000 (equivalent in GEL) - from 0.8% to 1%.

An asset you manage

Real estate purchase depends entirely on your desire and will. Whether you buy an apartment or a commercial space, it depends on you. Existing real estate is your asset, the management of which is entirely up to you, and you can sell, rent, and withdraw your investment at any time.