Michael Gerasimoff

Registered with Property118.com
Monday 16th November 2015


Latest Comments

Total Number of Property118 Comments: 4

Michael Gerasimoff

6:55 AM, 3rd March 2016
About 3 years ago

Supercar Club Seeks New HQ To Rent

Hi Mark!

You can try to contact Tranio international property broker. If they don't have a suitable listing in their online catalog, they'll put you through to the best local agent available in Malta free of charge. https://tranio.com/... Read More

Michael Gerasimoff

9:29 AM, 20th February 2016
About 3 years ago

Student Accommodation Investment - Experiences?

Mike,

Niche commercial property (e.g. student accommodation or retirement homes) is becoming increasingly attractive investment all over the world.

The UK student property market is developed and in strong demand, thanks to the country’s history of academic excellence, world-renowned institutions as well as growing local and international demand for British university courses.

University studies in developed countries are attracting growing numbers of students, both from overseas and locally. The UK and Germany had 2.3 and 2.7 million students enrolled last year. The number of students in Germany grew by 36% since 2005 and student numbers in London are expected rise by 50% over the next ten years according to JLL.

The UK student property market attracted $6.5 billion in 2015, compared to only $3 billion in the US, which has far more students, according to a Savills report on worldwide investment trends. In the meantime, Germany’s student market only received €220 million investments in 2014.

A key indicator for potential demand in the student property segment is the number of foreign students, as they have to find rental accommodation where they study. Foreign nationals make up 17% of students in the UK and 11% in Germany, where 63% of all students rent flats or apartments in private student complexes, preferably near campus and of 30 sq m, according to Savills.

In the UK, student property is particularly popular with foreign investors from the US, Russia and the Middle East. American investments made up 80% of cross-border deals into this segment between September 2014 and 2015 accord to Savills. At the same time, LetterOne Treasury Services, a foundation led by Russian oligarch Mikhail Fridman, invested $770 million into the Pure Student Living student housing management company in 2015.

Investors choosing student accommodation are also better off than those buying standard rental property: prime initial yields on direct let student property are about 5% in both Germany and the UK according to Savills’s World Student Housing report 2015/16.

In 2015, yields in the UK ranged from 3.75–6.75% with the lowest in prime London: 3.75% based on a 25-year lease to a recognised university up to 4.75% for direct let. Despite lower annual revenue, these investments are the safest thanks to high demand and good student growth prospects. Prime regional properties brought in 4.50–6.00% with secondary regional locations earning between 5.00% and 6.75% due to enhanced risk linked to demand and future growth prospects for these more secluded destinations.

Cities in the north of the UK present excellent investment prospects as over two thirds of student rentals are not in purpose-built or university campus student accommodation according to the Knight Frank report on Student Accommodation 2014. Instead, the vast majority of students rent from the common residential housing stock.

The most promising UK cities for investing in student property:

Liverpool
Leeds
Manchester
Newcastle
Sheffield
(Source: Tranio.com)

When compared to other types of commercial property, student accommodation has a number of advantages:

-relatively low barriers to entry: investors can buy the whole building or one/several units
-lower building costs for student property compared to standard accommodation
-stable demand: this segment is less affected by economic crises

Nevertheless, there are some risks involved.

According to Marina Filitchkina, head of sales at Tranio international property broker, "student property is more difficult to sell than regular flats as it has its own market audience and is built near large education hubs. Small investors do not have the possibility of transforming these into standard accommodation if they expect a guaranteed yield and often require the services of a management company, which will also detract from revenue. Nevertheless, all the signs are pointing towards growing success and demand for British and German universities and student accommodation, which is why we recommend them to clients looking for relatively high and stable yields."

(Reproduced in part from Tranio.com. The original article can be found here https://tranio.com/united-kingdom,germany/analytics/high_yields_and_growing_demand_for_student_property_in_the_uk_and_germany/)... Read More

Michael Gerasimoff

12:29 PM, 5th February 2016
About 3 years ago

Investment strategy for a 55 year old?

It’s hard to plan for life after work, says George Kachmazov, a founding partner of Tranio international property broker. However, building an investment portfolio is a good way to guarantee financial stability late in life. Your assets should generate regular yields and gain value under your possession. That way, you increase your chances of being able to sell it later or leave it to your loved ones.

The ideal investment portfolio contains a varied collection of assets both by type and location: this will effectively protect you from economic and political risks linked to one asset class or country. For instance, investing in securities, metals and property will protect your assets for the risks linked to a single market and a single country.

The point of a portfolio is not to make quick money, but to maintain your funds and save them from devaluation as inflation rises. To make it work, your revenue should always cover your expenses and you should always participate a little in managing the investment. The idea behind it: have more time to dedicate to your family, travelling, leisure and even a business for your own pleasure — without worrying about the money.

Before building a portfolio, successful investors know their budget, risks and financing options. They also have a strategy to maximise yields and manage their investments.

1. Initial budget
Investors usually start to actively build an investment portfolio when they have at least €1M available because a smaller budget wouldn’t generate enough return. In Europe, for instance, the average yield on residential property is 4%.

2. Investment strategy (what investment vehicles to choose)
In order to expand the portfolio, you must decide how much you want to invest in the long-term and what investment vehicles to choose like property, bonds, stocks, etc. Let’s say you are ready to allocate €2M in 2015 and want to achieve €13M in fifteen years: estimate how much your portfolio should increase in value as well as your current regular income. Most likely, you’ll only have to invest €300,000 per year to achieve that €13M target. Alternatively, you could choose to make a few big investments over this period, like three properties worth €3–4M each.

3. Risk assessment
Take note of the biggest and smallest risks linked to your investments and build your portfolio accordingly. When choosing real estate for example, if you need stable returns, you had better choose property with long-term rental contracts but lower yields. However, if you don’t, then short-term lettings in holiday destinations have higher yields or you could choose a property where the tenant’s lease is coming to an end.

4. Diversifying the portfolio
Location is a key risk because the country you choose will define the safety and profitability of your investment. However it’s not easy to build or manage a portfolio with different assets in different countries. There are different legal and taxation systems to deal as well as different contractors to manage the asset. Nevertheless, it’s still best to invest in two different countries or two different asset classes in one or two countries. For instance, Russian citizens often live in their Russian property and buy income-generating real estate abroad.

Choose a country with a reliable political system and a strong economy like Austria, the UK, Germany, the USA and France. For example, property in London and German cities gained 26% between 2010 and 2015 and is still expected to rise. To mitigate the risks linked to European property, you should consider investing some funds in financial instruments like securities from firms outside the Eurozone rather than looking for more property on the other continents.

5. Yields
Depending on the risk tolerance, the yield spread should be sufficient under current conditions. Later on, the risk profile can be adjusted and the appropriate investment decisions can be made if necessary. Standard commercial lettings yields in Europe are 5–6% per annum and residential property is only 4%, so if anyone promises you high yields.

6. Financing
Taking out a loan will give you leverage to increase the yield. Portfolio investments, unlike single purchases, get better terms on credit that increase yields. In Germany, you can get a loan of up to 60% of the property value at 2% per annum if you are investing in real estate. So if the average rental yield is 6.5%, the investment yield in view of the loan could be up to 8–10%. If the portfolio is not refinanced, liquidity can be quickly achieved without selling it by increasing the level of leverage. At the same time, banks will allow you to finance other investments on the back of your current assets.

7. Management
While it’s possible to build, manage and sell the portfolio independently but when you are investing abroad, it’s often better to hire a company specialised in managing property investments as it saves time. As for your future tenants, quality tenants will minimise turnover and simplify property management.

8. Exit strategy and deadlines
There are two exit strategies: sell it or transfer by inheritance.

— Inheritance: the portfolio grows in value over time, though moderately, and can be owned by a single family for more than 100 years. For that reason, you should make arrangements to transfer it with minimal tax expenses.

— Sale: if you need funds urgently (e.g., for your main business), choose a liquid asset that can be sold quickly (2–4 months) without a significant depreciation. The best way to achieve this is to buy property in prime locations or multipurpose real estate.

However, if your goal is to build a personal wealth fund, you are probably not planning on making a rapid exit (excluding force majeure). This kind of portfolio requires long-term thinking and an investment strategy for at least the next fifteen years as well as strong knowledge of the tax systems and potential risks. If you have any questions regarding the specifics of real estate investments, George is always there to help https://www.linkedin.com/pub/george-kachmazov/97/113/54b/en
(Most of this originally appeared on Move Channel)... Read More

Michael Gerasimoff

11:32 AM, 18th December 2015
About 3 years ago

US interest rate rise for the first time since 2006 by 0.25%

According to Leigh Stewart, a real estate analyst with Tranio, the latest Fed rate rise is only the first discreet step towards a more balanced financial policy. However, it may have unpredictable implications for global property market as investors tend "to redirect their funds into more lucrative markets (stock markets, for instance)", where there are better short-term profit expectations. https://tranio.com/usa/news/did_the_fed_just_break_the_real_estate_market_4971/
So, it seems the property market is going to be a little stand-offish for some time.... Read More