How much does it cost to invest in real estate?

Investing in real estate has long been one of Lithuanians' favorite ways to invest. This can be explained by the attractive properties of real estate: real estate investments are tangible, and we can touch the real estate object, and go there to inspect it, this feature psychologically contributes to the attractiveness of the investment. The second reason why Lithuanians like to invest in real estate is the value of real estate - over time, the price of real estate increases along with inflation, so the value of these investments not only does not decrease but also increases their value in the long term. The third reason is that investments in real estate can also bring additional income, real estate can be rented out, thereby obtaining constant rental income, and it can also be sold at a higher price after renovation. Since investing in real estate remains among the most popular investments, we want to help you understand how much real estate investing costs, because with correct calculations and planning, you can not only increase income but also reduce costs, which allows you to increase the yield of the investment.

 

When investing directly in real estate, the investment price can vary dramatically, this amount depends on several different factors: the location of the property, the condition of the object, market demand, administrative and unforeseen costs.

 

Property Location

The amount you will need to invest in real estate depends on the location, which will not only determine how much you will need to invest but at the same time, what kind of return you can expect. Even if you buy an apartment in the city center of Vilnius, you will pay a much higher price than if you buy an apartment a little further away from it. Such an apartment will be much more expensive, while potentially generating higher rental income. The same goes for different cities. In big cities, such as Vilnius and Kaunas, the price of housing will be much higher than in smaller cities, say Utena, Elektrėnai, or Taurage, so you may need to stretch your wallet much harder to buy a home. When buying in smaller towns, you will need less money, but the property is also less liquid here - it will take you longer to find tenants or, if necessary, to find buyers to sell your home. This happens because smaller cities have fewer residents looking for a place to stay, so demand is lower.

 

Object condition

Another factor that determines the price of real estate and the size of the initial investment is the condition of the purchased object. When preparing a business plan, it is important to assess whether you want to buy an abandoned house in need of repair, which you will clean and renovate yourself or with the help of someone else and prepare for sale or rent, or whether you plan to buy an already furnished, tidy apartment that you can rent out practically immediately. In the first case, you may need up to several times less initial capital, but you must invest your time and additional income for home renovation. Although the first method will take more time and require more knowledge and work, by investing in this way, you can expect a much higher return on the initial investment, because you will spend less money on buying an abandoned house.

 

Market demand

It is important not only to choose the right place where you will purchase a real estate object but also to assess the market situation because the amount of money you will need to allocate for the purchase of housing will depend on the market demand and supply. In the fall, when new students move to the big cities, the school summer vacation ends, and the supply of real estate increases, so the prices adjust and increase, at this time, when buying a home, you need to be prepared that you may need a larger amount of money, similarly with resorts in the summer, when the flow of tourists increases housing demand, so both rent and purchase prices increase. Therefore, to estimate how much an investment in real estate will cost, you need to take into account market demand and supply.

 

When starting to invest directly in real estate, we recommend that you thoroughly assess the market, gather reliable information, and consult with specialists in this field, because they will not only help you assess all possible risks, because where there is potential to earn, there is always the possibility of losing part or all of the investment. At the same time, experts will help to reduce the initial costs, and by using the advice, you will increase the return on investment.

 

For those who do not have the necessary amount to invest in real estate, there is another opportunity created by alternative investment through crowdfunding platforms. On such platforms, you invest in business loans that are secured by the mortgage of real estate. Investing in this way, you can contribute to the implementation of the business plan for just 100 euros. This way of investing is convenient because you will not need a large initial capital, you will be able to divide your investment into smaller amounts into a larger number of projects that are located in different locations, and the platform manages the entire administration process, so you need to spend less time both evaluating the project, both general