Going Residential
When you’ ve got your eye on an apartment, doing your homework is simply a must
Real estate investment has made a comeback in a big way – with new products, new international players and intriguing prospects. Looking at the residential side, for instance, it is easy to see that the current strong housing demand – together with abundant supply of capital – are pushing for a significant increase in the supply of rental residential dwellings.
A ccording to the Confederation of
Finnish Construction Industries RT, the construction of some 36,000 new dwellings was started in 2016 – the highest number of starts within the past decade. New construction is concentrated on apartment buildings, and within this category, there are three equally large sub-categories: owneroccupied, subsidised rental and non-regulated rental dwellings.
Nevertheless, as with any heating market, there are smart moves and not-so-smart moves. Saara Raitala, Attorney-at-Law, Partner, at Eversheds Attorneys Ltd. points out that investing in residential real estate requires that you’ re well aware of the nature of the investment and the realities therein.
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Long Term Commitment
For instance,“ going residential” is typically a long-term investment; while properties with, say, a great location may be relatively easy to get off your hands if you’ re a private investor, the liquidity is nowhere near that of the stock market. Raitala also observes that there is no diversification at all when you’ re purchasing a single apartment – for those wary of putting all their eggs in the same basket, this is definitely a red flag.
“ On the other hand, if you’ re looking to hedge your bets by indirect investment in the form of a residential fund, for instance, you must fully understand the terms of the investment, starting with the risks and actual profits.”
Eversheds deals with all legal aspects of the real estate business from land purchases, planning and land use agreements to construction and upkeep of real estate holdings. The company also serves private individuals in business related to housing corporations, dwelling and real estate sales.
Nuts & Bolts
According to Saara Raitala, it is crucial that you consider what it is that you’ re actually buying. Purchasing an apartment from a housing company means buying a part of that company.“ If the housing company is of poor quality, your investment is probably not that great, either,” she says. Furthermore, buying apartments as an investment